More than three quarters (78%) of private equity fund managers expect traditional exit activity to surge over the next two years, according to research from Ocorian, a leading U.S. and global asset services provider.
This anticipated increase is expected across trade sales, IPOs and secondary buyouts, signalling a shift from the constrained deal environment of recent years.
A further 20% of managers anticipate a slight increase in exit volumes, with alternative structures remaining relevant. Overall, 98% of private equity fund managers expect an upward trajectory in realisations. The remaining respondents anticipate that the level and type of exit activity will remain broadly the same. Ocorian’s study of 300 senior executives at private equity fund managers in the U.S. and across Europe outlines an industry preparing to return capital to investors.
Exit appetite is returning; execution remains a challenge
While the expectations for fund exits are high, the study also reveals a number of factors influencing their timings .
Around two thirds (66%) of private equity fund managers surveyed cite regulatory delays and complexity as the single largest obstacle influencing fund exits. Portfolio company operational readiness is the second most prominent issue, with 53% of private equity managers stating that
portfolio companies are not yet exit-ready. Meanwhile, 50% point to limited buyer appetite, 47% cite uncertain market conditions, and 44% continue to navigate valuation gaps between buyers and sellers. Just 6% of managers state a preference for continuation fund structures.
Richard Hansford, Head of Growth, EMEA at Ocorian, said: “ Our findings point to significant pent-up demand for asset realisation, with more than three-quarters of fund managers expecting a significant increase in traditional sales, IPOs and secondaries. While expectations for exit activity are increasing, timing and routes to exit will vary across portfolios, making exit readiness and flexibility very important.”
Rebecca Thorpe, Head of Regulatory Consulting EMEA at Ocorian, added “Some exits attract more regulatory scrutiny than others when looking across IPOs, secondary buyouts and trade sales. Plus, the underlying asset can have a big impact on the regulatory complexity involved. So, it is interesting that regulatory complexity emerges as a significant factor influencing exit timings, compliance and structuring. This tells us regulation and compliance have become strategic variables in deal delivery.
Speed to market is no longer just about finding the right buyer; it also depends on having the right specialist advisors on hand ready to act fast to navigate any regulatory requirements surrounding a transaction.”
