Best of LinkedIn: Private Equity: Exit Strategies CW 44/ 45 2026

The exit market: more value, fewer deals

• Global PE exit value reached $985.2 billion in the first nine months of 2026 and $1.4 trillion on a rolling 12-month basis, the highest since Q1 2022.
• Exit volume fell to 3,295 transactions, the lowest since Q1 2021. One voice calls this a liquidity illusion.
• McKinsey reports that global exit value rose 41% in 2025 while transaction count declined 15%.
• 16,000 portfolio companies have been held for more than four years. That is 52% of global buyout inventory, the highest ever seen.
• Q3 was the best quarter for global exits since 2021, but mostly A-grade companies traded. The B-grade backlog waits for more realistic pricing.
• Gain's US report shows exit deal value tracking lower in 2026, with consumer, industrials and science and health exits particularly weak.
• EY's Q3 PE Pulse Survey points to stronger exits and growing buyside activity.

Longer holds and the cost of waiting

• US holding periods are up to 5.5 years, and 37% of PE assets stay longer than 7 years.
• Only 15% of the 2021 vintage was realized by year 4, against a typical 25 to 30%.
• Another analysis puts average holds around seven years, up from five to six, with software revenue multiples roughly halved since 2021.
• European mid-market multiples fell about 28% between mid 2021 and end 2025, while EUR3M rose about 2.7 points since Q1 2022. Bain sees holds 1 to 2 years longer than in 2021.
• Russell Reynolds studied 196 European PE exits: deals with no CEO change were held 5.5 years, deals with two changes 8.5 years.
• Mid-hold CEO changes can stabilize operations without moving the exit case forward. Quarterly reviews of the multiple, buyer universe, quality of earnings and add-ons keep both in view.
• SuperReturn 2026 named valuation gaps, pressure to return capital and the need to show operational progress as the main sticking points for European exits.

Secondaries and continuation vehicles reach record scale

• Secondaries hit a record $121 billion in H1 2026, up about 19% year over year: $65 billion GP-led and $56 billion LP-led, with roughly $194 billion of dry powder left.
• Jefferies counts a record $118 billion. GP-led volume rose 32% to $62 billion and is the majority of the market for the first time since 2021.
• Continuation vehicles make up almost 9 in 10 GP-led deals, and two thirds of those are single-asset.
• CVs were about 15% of sponsor-backed exit value in 2025, against 8% in 2021. 83% of the top 100 global buyout sponsors have used them.
• In the US, 29 CV exits of $100 million or more delivered $33 billion in exit value year to date.
• Credit secondaries reached $20.4 billion in six months, up 122%, with around 83% GP-led. Full-year forecasts for all secondaries sit near $250 billion.
• Banks are pitching evergreen vehicles that could hold companies for ten to fifteen years. The test is whether they improve DPI or only keep unrealized value on the books.
• Fewer than 5% of LPs are rolling in continuation funds, and LPs raise concerns about pricing transparency and conflicts of interest.

DPI, LP pressure and where returns come from now

• DPI has dropped to 6% of total assets, down from an average of 16% a few years ago. LPs now rank DPI as high as MOIC.
• 2021 buyout funds have returned about 14 cents on the dollar.
• The denominator effect is back: public markets rallied, distributions stalled and PE allocations compress, despite roughly $1.3 trillion of dry powder.
• A PE seller may choose a lower bid when cash at closing, timing and execution certainty matter more than headline valuation.
• Cheap debt and multiple expansion drove 59% of buyout returns on 2010 to 2022 deals. That bridge is mostly gone.
• Buyout multiples hit a record 11.8x EBITDA, and 18.1x for deals over $500 million, while leverage is down to 37%.
• Five turns of debt, a 2.5x target and a 10x exit require $21.5 million of EBITDA by year five. At 5% growth, equity comes back at about 1.25x.
• A debt wall looms for deals financed in low rate years. Underwriting should allow for rates rising another 100 to 200 basis points.

Exit readiness starts on day one

• A Deloitte CFO panel stressed that creating value and getting paid for it are not the same. Prove what reached earnings and cash, and build the evidence as you go.
• PwC sees buyers rarely expecting a clean tax profile. They expect identified, documented and quantified risks with a remediation plan, ideally after a tax health check 12 to 24 months before exit.
• A buyer walked away over historic compliance exposure even after the gap was fixed. Warranty and indemnity cover will not normally extend to issues the buyer already knows about.
• One voice calls it exitability debt: operational complexity carried into an exit because difficult improvements were repeatedly postponed.
• Sponsors are looking to move in 2027. Equator sees exit readiness advice becoming a standard early step in vendor preparation, with many businesses heading to market in H1 2027.
• Sales that depend on the owner and costs nobody has questioned for years both show up in diligence, and the buyer keeps the saving.
• Clean master data, automated data processes and one set of numbers for investor, bank and management are the base for a smooth data room.
• EY's CTO diagnostic asks one core question: if buyer technology diligence started tomorrow, where is the company least prepared?

AI and the exit story

• Software with a credible AI story can sell at 10x to 15x ARR, against three to six times without one. Sellers increasingly run off-market processes with a short list of buyers.
• US software PE deal value reached $17.7 billion in Q3, up 50% on Q2, while deal count fell 9% to 181.
• A Forbes column cites an S&P survey in which 64% of GPs rated AI sourcing ineffective, and FTI data showing only 7% of portfolio companies run AI at enterprise scale.
• The same column found no evidence that buyers pay an exit premium for AI gains. Buyers pay for margin already delivered.
• Agentic AI that runs core processes end to end, with humans handling exceptions, is named as the bigger lever than copilots and pilots.
• Only 6% of firms see high AI impact today, but 70% expect it to be a major factor within a few years. 80% of GPs have increased AI spend across portfolios.
• Most portfolio companies lack the clean, connected data infrastructure to back AI spend. The infrastructure question comes before the AI question.
• An AI-native SaaS company could generate the same revenue as a 100-person rival with 40 people, which could make operating leverage the next source of multiple expansion.

Exit routes and deal examples

• Blackstone data since 2018: strategic buyers account for 41% of exits (53 of 130), sponsor-to-sponsor sales 32% and IPOs 12% (15 exits). 18 assets are in a live sale process.
• GE Vernova agreed to buy Trench Group from Triton Partners for $9.0 billion. Triton carved it out of Siemens Energy in 2024, and revenue has roughly doubled since.
• Maximus is buying Agile Defense for $660 million, capping Enlightenment Capital's build-and-exit of two platforms.
• 5th Century Partners sold Radon Medical Imaging to Leonard Green & Partners after four years, with revenue more than tripled and a footprint grown from five states to 26.
• Clearview Capital reports a 29x return on an adult daycare roll-up of 15 acquisitions before selling to Audax.
• All-secondary IPOs show exit through public markets: Quickmart in Kenya offers a 50% stake worth KSh 15 billion, and Bamboo Insurance postponed a $665 million NYSE listing the day before trading.
• Founders have routes beyond a sale: management buyout, family succession, employee ownership, an investor taking money off the table or an orderly wind-down. The best exits are planned years ahead.
• In minority deals such as Advent's ₹3,150 crore for 24.9% of Yatharth Hospitals, the exit belongs to someone else, so exit rights decide the deal.

Thanks to Ashutosh Kumar Jha, Dale Zwizinski, Gurm Dhillon, Greg Head, Mikk Markus, James McRae, Alexis Sikorsky, Sarah-Jane Butler, Lee Deakin, Eva Garcia de la Fuente, Stephen Segel, Swapnil Jambhulkar, Richard Owen, Matt Pencek, Lee McCabe, Marla Capozzi, Jean-Philippe Bertrand, Eugi B., Joanna Stone, Elle Solferini, Chris LeRoy, Joel Smith, Philipp Kraft, Wayne Marhelski, Lou Sokolovskiy, Lucas Bechtle, Joachim Lang, Blake Richards, Chris Gauld, Marcus Emmet, Brian Lindholm, Frister Haveman, Alex Edlich, Raj Dave, Louis Lehot, Caris Sandhu, Angus Turnbull, Nicola Ebmeyer, Nicholas Metzgen,Thomas Delage de Luget and more for the insights in this edition.

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Find the full list of posts and voices on LinkedIn: https://www.linkedin.com/pulse/best-linkedin-cw-44-45-private-equity-exit-strategies-thomas-allgeyer-8zcye/