Private Equity Must Sell More Assets — at Whatever Price

The rebirth of private equity dealmaking has been supposedly just around the corner for well over a year. But even as investment bankers cheer a rush of mergers & acquisitions and the reopening of the market for initial public offerings, many financial sponsors are still struggling to catch the same wave.

The lack of exits from portfolio companies by private equity has been a burden since interest rates shot higher in 2022. It’s left many managers struggling to raise fresh money from investors amid a drought of payouts in the other direction. It also led sponsors to hunt out new and potentially riskier ways to return cash to their backers. I predicted in summer 2023 it would take a long time to unjam the private equity machine; today, the cogs are still turning slowly.