The PE Exit Bottleneck
Middle-market sponsors are sitting on thousands of aging portfolio companies as hold periods stretch, multiples reset and sector-specific headwinds—from healthcare policy to AI disruption—reshape the path to liquidity.
While the M&A world of bankers, advisers and middle-market private equity firms has voiced more optimism around dealmaking, sponsors are managing their way through a backlog of companies bought during the boom years leading up to 2022.
This will be a growing problem for middle-market private equity firms at a time when businesses are no longer selling for the lofty multiples they commanded during the peak valuation years of near-zero interest rates that sparked record dealmaking volumes in 2021.