PE Exits
PE exits are on a historic run as firms net billions
October 26, 2021
Private equity exits are on fire as rapid economic growth and strong markets fuel an already historic year for firms and portfolio companies.
PitchBook’s Q3 2021 US PE Breakdown illustrates an astounding run for PE exits as 2021 year-to-date exit value is already 50% larger than the next-highest annual figure, and currently estimated to top $638 billion through Q3. Additionally, 1,129 exits are estimated to be completed through Sept. 30.
Rebecca Springer, a private equity analyst at PitchBook, credits a "perfect storm" for the unrivaled success.
"The underlying drivers are strong economic growth and highly liquid markets," Springer said. "That means portfolio companies are growing their revenue, there's a lot of capital chasing deals, and buyers can easily finance acquisitions."
Springer said many industries have spiked since the pandemic trough, meaning that GPs are pulling forward planned exits and doing so at favorable multiples.
While 2021's exit count has not yet topped that of 2018, Springer said this year's count is still on pace to set an annual record.
While nearly all industries have seen strong exit activity, Springer said the technology and healthcare sectors have been notably significant.
Springer said exit value is far exceeding count this year because of an explosion in large exits—especially exits to public markets via IPOs and, to a lesser extent, SPAC mergers.
"The median PE exit size has skyrocketed for public listings and is also up significantly for exits to strategics," Springer said. "A key reason why is that tech and tech-related companies are accounting for more and more of PE firm portfolios, and many of these companies are experiencing very high valuation growth."
Featured image by twomeows/Getty Images
PitchBook’s Q3 2021 US PE Breakdown illustrates an astounding run for PE exits as 2021 year-to-date exit value is already 50% larger than the next-highest annual figure, and currently estimated to top $638 billion through Q3. Additionally, 1,129 exits are estimated to be completed through Sept. 30.
Rebecca Springer, a private equity analyst at PitchBook, credits a "perfect storm" for the unrivaled success.
"The underlying drivers are strong economic growth and highly liquid markets," Springer said. "That means portfolio companies are growing their revenue, there's a lot of capital chasing deals, and buyers can easily finance acquisitions."
Springer said many industries have spiked since the pandemic trough, meaning that GPs are pulling forward planned exits and doing so at favorable multiples.
While 2021's exit count has not yet topped that of 2018, Springer said this year's count is still on pace to set an annual record.
While nearly all industries have seen strong exit activity, Springer said the technology and healthcare sectors have been notably significant.
Springer said exit value is far exceeding count this year because of an explosion in large exits—especially exits to public markets via IPOs and, to a lesser extent, SPAC mergers.
"The median PE exit size has skyrocketed for public listings and is also up significantly for exits to strategics," Springer said. "A key reason why is that tech and tech-related companies are accounting for more and more of PE firm portfolios, and many of these companies are experiencing very high valuation growth."
Featured image by twomeows/Getty Images
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