Breakingviews - Private equity bids long goodbye to IPOs

Jeffrey Goldfarb - Reuters - 13/12
Buyout firms are frantically seeking the nearest exits, and stock exchanges have become an impractical egress. The situation gives investors of all shapes and sizes two important things to consider for 2025: Private equity will benefit only marginally from any rebound in initial public offerings, while the premium on creative finance will keep growing.
NEW YORK, Dec 13 (Reuters Breakingviews) - Buyout firms are frantically seeking the nearest exits, and stock exchanges have become an impractical egress. The situation gives investors of all shapes and sizes two important things to consider for 2025: Private equity will benefit only marginally from any rebound in initial public offerings, while the premium on creative finance will keep growing.
For years, the industry sold or listed portfolio companies, returning the proceeds to pension funds and other backers, which then reinvested in new private equity funds. The money-go-round slowed considerably when interest rates rose. Buyout shops worldwide called $130 billion more from their investors than they returned to them between 2022 and early 2024, according to the latest data available from research outfit Preqin. It’s an unsustainable situation, as many firms are planning to pass the cap for new funds ove...
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