The Exit Backlog Keeps Growing

• Bain counts roughly 32,000 unsold PE portfolio companies worth $3.8 trillion, an inventory to exit ratio near 11x against a historical norm of 7x
• Excluding sponsor-to-sponsor sales, the real clearing rate implies more than two decades to work through the backlog
• Pitchbook puts unsold US portfolio companies at 13,325 as of May, up from 12,900 in October, an 11 year clearing timeline
• The New York Times cites roughly 34,000 unsold companies overall, more than double the count a decade ago
• European median holding periods hit 5.8 years in H1 2026, a new high, with software deal activity at a post-2020 low
• UK exits fell to 96 in H1 2026, down nearly 30 percent year on year, even as exit values doubled to £23.4 billion on fewer, larger deals
• Global exits hit just 1,315 at midyear, the slowest pace in over a decade, while sponsors kept buying at roughly twice that rate

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Secondaries Become Core Infrastructure

• Jefferies reports the global secondary market hit a record $118 billion in H1 2026, split roughly evenly between LP-led and GP-led volume
• StepStone activated a new PE secondaries fund in June with about $2.5 billion raised, plus a GP-led vehicle and a new VC secondaries fund with a $1 billion first close
• GP-led secondaries grew to $106 billion in 2025 from $70 billion, prompting an SEC investigation into how GPs price assets on both sides of the same trade
• Zombie fund NAV reached $350 billion, roughly 3.5 times the 2015 level, as distributions fell to about 11 percent of fund value versus 25 percent a decade ago
• Evercore's Nigel Dawn called secondaries core market infrastructure, a view echoed by Lexington Partners as a sign private markets are maturing
• Central and Eastern Europe PE exits rose 26 percent year on year to €1.71 billion in 2025, the highest since 2020

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Deal and Tax Readiness Shape Who Gets to Exit

• The EY Global PE Exit Readiness Study found 86 percent of GPs said preparation improved valuations, with 12 to 24 month lead times showing the strongest gains
• UK Business Asset Disposal Relief rose to 18 percent in April 2026, lifting the tax bill on a £1 million gain from £140,000 to £180,000
• Nearly 60 percent of UK owner-managed businesses under £20 million go into a sale process without a finance director in place
• The average business scores just 54 percent on buyer readiness, pushing most sellers toward earnouts and deferred payments rather than a clean cash exit
• Five recurring tax issues, including governance, employment taxes, and VAT, continue to delay UK transactions and complicate insurance underwriting

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Notable Exits and Transactions

• Silver Lake and Saudi Arabia's PIF closed a $55 billion take-private of Electronic Arts, the largest LBO on record
• Bain Capital still owns three quarters of Bob's Discount Furniture twelve years after buying it, roughly double the six-year median hold for US buyouts
• Procter & Gamble acquired supplements brand Thorne for $3.8 billion, its fourth ownership change since a 2010 management buyout
• GRO sold its majority stake in Queue-it to THL Partners, with recurring revenue up more than fivefold since GRO's 2020 investment
• Alantra exited Fund III from Salto Systems while reinvesting through Fund IV, having backed the company since 2013 as revenue grew sixfold
• Eos Capital exited The Mushara Collection at a 40 percent IRR and 4.4x invested capital, Namibia's largest unlisted PE exit to date
• Blackstone's 2007 Hilton buyout wiped out its equity check on paper in 2008 before operational restructuring made it the most profitable PE buyout on record

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Private Equity Consolidates the Accounting Profession

• Private equity now holds stakes in roughly 24 of the top 100 US accounting firms, with multiples climbing from 8 to 10x EBITDA to 11 to 14x in five years
• The first ownership flips are underway: Citrin Cooperman moved from New Mountain Capital to Blackstone, Schellman moved from Lightyear Capital to Goldman Sachs Alternatives
• PE-backed accounting firms grew 27 percent this year against 9.1 percent for independents, and all four IPA 100 debuts were PE-backed
• 1,052 accounting firms now carry private equity on the cap table, roughly half of the top 30 US firms among them
• New entrant Current has raised close to $1 billion to buy local practices, pitching AI-driven rebuilds of the firms it acquires

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Rethinking Who Shares in the Exit

• Blackstone said every future US buyout will include employee bonuses tied to its own deal returns, already running at Jersey Mike's ahead of its $7 billion IPO
• Fewer than 1 percent of the workforce at large-cap PE portfolio companies typically shares directly in a successful exit
• Cannabis founders are turning to ESOPs as a tax-efficient alternative to selling to an MSO or strategic buyer
• Founders weighing succession are also considering seller financing and family succession as routes that preserve more control

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Thanks to Eric Fiegoli, Marie Deller, Melanie Clark, Doug McCullough, Andrew Moczygemba, Jerald Bussen, Phil Scott, Alex Eck, James Wright, Alexis Sikorsky, Simon Leroux, Craig Picken, Brian Dukes, Christoph Jost, Ben Banks., Christopher J. Conti, Mustafa Siddiqui, Ricky Jain, Rob Brown, Alexander Brokhin, Felix Rose, Paul Cohn, Swapnil Jambhulkar, Scott Bingham, Chelsea Kneeland, Hannah Doss, Anthony Caporrino, and Marc S. Cooper, along with many more, for contributing insights to this edition.

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