Amidst all the bad news about declining M&A activity and PE dealflow from around the globe, it is uplifting to read that industry insiders expect exits to increase in the coming 12 months, which has to be good news for LPs waiting for distributions and for GPs that want to raise new funds.
According to E&Y’s PE Capital Confidence Barometer, over 40% of PE firms it surveyed in all regions anticipate selling more assets (in terms of value) over the next 12 months. The respondents believe that the secondary market will continue to be an important exit route.
Only a fifth of investors (22%) anticipate an increase in exits via IPO. About half of GPs also think that sales to strategic buyers will increase. E&Y says that it found that the majority of companies that intend to engage in M&A are expecting to do smaller deals (USD 500 million and less), so it posits that PE firms selling larger portfolio companies are likely to find the field of buyers more limited. (Image source: E&Y )