January 4, 2016
Interviewed by: Privcap
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PE Exits: Robust, but Good Enough?

Private equity industry experts from EY and Coller Capital highlight the key trends and drivers of the private equity exit market in 2015.

Private equity industry experts from EY and Coller Capital highlight the key trends and drivers of the private equity exit market in 2015.

PE Exits: Robust, But Good Enough?
2015 in Review

Peter Witte, EY: 2015 was a very active year for private equity exits. We’re on track for about a 20% decline versus last year, which is still good enough. We’re the second most-active year for exits on record. What we did see was a big change in the type of exits. In 2014, we saw about $110 billion worth of PE-backed IPOs.

This year, we’re on track for about half of that. When the summer hit, and some concerns around China surfaced, that essentially closed out the IPO market for most issuers for the balance of the year. Fortunately, we didn’t see the same thing on the trade-sale side. Corporate acquirers have been very active as buyers of private equity assets throughout the year. In total, they’ve accounted for about 70% of private equity exit activity this year.

Luca Salvato, Coller Capital: But there’s still a long way to go. If you look at the vintage years of 2005 to ’08, and you look at the net asset value that is still captured within those funds, it’s enormous. It’s probably $800 billion or thereabouts, in that order of magnitude, that is still sitting in those funds. Now, those funds are reaching or coming toward the end of their natural lives. And it’s hard to see that they’re going to be able to release all of that through just natural distributions and selling of companies, because that pressure is building.

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