What is your maximum hold period for a portfolio company with which you (and your investors) are comfortable? (Select one)
60%
50%
50%
47%
45%
45%
42%
42%
40%
40%
40%
30%
20%
17%
11%
11%
10%
5%
3%
2%
0%
0%
0%
10 yȃǸrs
15 yȃǸrs
Morȃ thǸn 15 yȃǸrs
VǸriȃs ǸccordinȌ to thȃ mǸnǸȌȃmȃnt fȃȃ for thȃ undȃrlyinȌ fund
TotǸl
AsiǸ-PǸcific
EMEA
North AmȃricǸ
Extended hold periods Slow exit activity has seen GPs hold onto portfolio companies for longer, with analysis from Private Equity Info putting the average hold period for PE-backed companies at 5.8 years, the longest average since 2000. In a large majority of cases, respondents’ maximum hold period for a portfolio company with which they and their investors are comfortable is either 10 years (45%) or 15 years (42%), further underscoring how the industry is growing accustomed to extended hold periods. “The fund life cycle is undoubtedly becoming longer, and the standard LP investment timeframe is stretching out. The growth in the CV market (see Alternative liquidity solutions, page 32), which provides different structures for GPs to retain their exposure to trophy assets, is a further sign of this,” says Comis.
The fund life cycle is undoubtedly becoming longer, and the standard LP investment timeframe is stretching out. Sabina Comis Dechert LLP
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