Ocorian: Private equity is primed for a surge in traditional exits
More than three quarters (78%) of private equity fund managers expect traditional exit activity to surge over the next two years, according to research from Ocorian.
This anticipated increase is expected across trade sales, IPOs and secondary buyouts, signalling a shift from the constrained deal environment of recent years.
A further 20% of managers anticipate a slight increase in exit volumes, with alternative structures remaining relevant. Overall, 98% of private equity fund managers expect an upward trajectory in realisations. The remaining respondents anticipate that the level and type of exit activity will remain broadly the same. Ocorian’s study of 300 senior executives at private equity fund managers in the U.S. and across Europe outlines an industry preparing to return capital to investors.
Exit appetite is returning; execution remains a challenge:
While the expectations for fund exits are high, the study also reveals a number of factors influencing their timings. Around two thirds (66%) of private equity fund managers surveyed cite regulatory delays and complexity as the single largest obstacle influencing fund exits. Portfolio company operational readiness is the second most prominent issue, with 53% of private equity managers stating that portfolio companies are not yet exit-ready.
Meanwhile, 50% point to limited buyer appetite, 47% cite uncertain market conditions, and 44% continue to navigate valuation gaps between buyers and sellers. Just 6% of managers state a preference for continuation fund structures.