Typical private equity holding periods range on average globally between three and five years until exit. An upward trend in holding periods has been the case since the financial crisis, but the latest exit data analyzed by Preqin shows a reduction in the average holding period, which it says may indicate a significant milestone has been reached. It may lead to holding periods returning to a more normal state and a new round of fundraising as allocations are redistributed.
Normally, portfolio companies purchased during the buyout boom of 2006-2007 would have been exited by now, says Preqin. However, 48% of companies acquired in 2006 are yet to be exited entirely (the figure was 57% last year). The corresponding proportion for investments made in 2007 currently stands at 61%, down from 67% a year ago.