Private Equity Exits Become A Favourite: Last Three Years See Almost Half Of All PE Exits Since 2003

According to a report by Mckinsey and Co, a global consulting firm, 48 per cent of the PE exits since 2003 came in the last three years of the present NDA government, as reported by Mint.

Private Equity (PE) exits represent the final stage in the investment process wherein some of the existing investors sell their stake in an investment (or a company) before it undergoes corporate acquisition or an IPO (Initial Public Offering).

“In 2015, private equity had an overhang of un-exited investment. Since then, the pace of exits has grown significantly, to $10.8 billion in 2017—a tenfold growth since 2009. In fact, 48 per cent of all exits since 2003 (by value) took place in the past three years,” said the report, titled, “Indian Private Equity: Coming of Age.”

It should also be noted that 2017 was the best year for PE exits since such deals grew by over 60 per cent in value terms to $15.7 billion, over the preceding year.

In recent times, the importance of PE exits (also called secondary deals) has been increasing when compared to other exit approaches like an IPO or an acquisition. “This finding underscores the influence private-equity investors wield over exit approaches and timing to capture value, reposition portfolio companies as attractive acquisition targets, and steer other owners and investors through an exit process.