Free Trial Corporate Access

Global Investor Magazine
Global Investor Magazine Copying and distributing are prohibited without permission of the publisher

Conditions 'perfect' for private equity exits

02 June 2014

Market conditions are perfect for exiting private equity investments in the West. Deploying new capital will require looking further afield or at smaller deals, finds Anthony Lane

Read more: EQT QE Bain Capital Advent International ATP Apollo

As confidence in the global economy continues to grow, the global private equity industry is reaping the benefits from a surge of exits. Portfolio companies are either being sold or listed on markets in what is widely predicted to be the best year for exits, with the sole exception of 2007.

But the return to growth and soaring company valuations are proving doubleedged for private equity funds, which are collectively sitting on a record $1.07trn of so-called dry powder – money provided by limited partnership (LP) funds that they have been unwilling or unable to invest.

Those unspent funds, which are almost certain to grow over the next few years, have been buoyed by the effects of quantitative easing (QE) and represent the equivalent of three and a half times the value of all private equity deals completed in 2013. The situation faced in the Nordic nations, which have a...