It's been a long half decade for investors exposed to the U.S. housing market. PE firms have been particularly stuck in the downturn, with longer-term, less liquid investments waiting for that never-quite-here-yet recovery to arrive. Exits and paydays have been tricky to find. At least satisfactory ones.
That may be starting to change. Combined exit activity in the building products, construction & engineering and wood/hard products industries is stronger so far this year than in recent memory. In fact, PE investors have already completed more exits in those three industries in 2013 than in either 2012 or 2011, according to the PitchBook Platform. At its current pace, 2013 might challenge the high-water mark set in 2007 at the height of the housing boom, at least in terms of total exits.
Volatility in the public markets has crimped some investors looking to cash-out through IPOs. HD Supply comes to mind, which priced its June offering at $18, comfortably below its expected $20 to $23 range. Stock Building Supply, detailed below, just priced its IPO at $14, versus an anticipated $16 to $18 range. And yet, despite the bumpy ride, several other PE-backed housing companies have gone public this year, including Taylor Morrison Home, Ply Gem Industries and Tri Pointe Homes. It looks like investors are starting to see brighter exit signs. Maybe even a recovery.