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PE & VC Exits


PE & VC Exits

June 14, 2017

Headlines may dwell on dealmaking, but amid continuing signs that the venture capital and private equity investing cycles are slowing gradually, liquidity for fund investors remains a paramount concern. As our most recent Fund Benchmarking report showed, cash flows were so high in the recent past that limited partners are still willing to write hefty checks to PE and VC fund managers, but plenty of value remains yet to be realized, across the board. For VCs, finally seeing their most vaunted and richly valued portfolio companies either take to the public markets or accede to corporate buyers could reap some of the massive paper gains many vehicles still hold. From a PE manager's perspective, managing longer-term portfolio performance by clearing off the most aged assets remains a key focus.

Thus, in PitchBook's 2017 PE & VC Exits, our analysts take the opportunity to dive into granular exit datasets ranging from secondary buyout multiples to sales by sector and size in order to assess whether the steady decline in exit volume is problematic or not. Is it a consequence of overall cyclicality, and can savvy fund managers still achieve liquidity for their investors as the tide rolls over into the later innings, or could exits resurge? Read the report, sponsored by Deloitte, to find out.

Report Highlights:

  • PE exits across North America and Europe are on pace to be down 24% this year with just $168.3 billion exited across 791 deals.
  • B2C PE exits are off to a slow start after $149 billion in exit value last year. The reverse in trend may be driven by the much discussed “death of retail” as brick-and-mortar retail companies struggle to achieve the growth necessary for successful exits.
  • Buyouts accounting for highest percentage of VC-backed exits in more than a decade, while acquisitions have fallen to decade low.

Note: The report was updated on June 16, 2017 as a dataset on average exit sizes was updated due to a transaction being deemed ineligible. In the same update, the tables of select exits were updated to better reflect majority-control PE-backed exits rather than the original selection.