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  • Writer's pictureAmi Kassar

AmiSight 5/3: Prioritizing the Private Equity Exit Conundrum

Private equity has been on a rollercoaster ride the past two years. From peaking in 2021, deal value has fallen 60%, exit value is down 66%, and the number of funds closing is off by nearly 55%. As such, righting this sinking ship has become a top priority among experts in the industry.

In “Private Equity Outlook 2024: The Liquidity Imperative,” Bain & Company partners break down the burgeoning crisis and suggest how to correct it in their 2024 Global Private Equity Report.

As the economy pulled itself out of the pandemic, interest rates rose rapidly, leading to sharp declines in dealmaking, exits, and fundraising. Spiking interest rates derailed dealmaking in 2023 and left the capital flywheel sputtering. 

Although the numbers resemble the period following the 2008–09 global financial crisis (GFC), the situation the industry faces today is largely unprecedented.  The long-term outlook remains sound, analysts believe, but breaking the logjam will require more robust approaches to value creation and rapid innovation in liquidity solutions. Among these are: Doubling down on value creation, managing across the portfolio and professionalizing fundraising. 

While solutions vary, the report finds it is clear that passively waiting for conditions to recover is not a viable strategy.

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