In the first nine months of 2023, buyout made only $584bn from selling companies outright or taking them public – $100bn short of what the industry raised in the same period last year, according to a report by the Financial Times.
Citing data from PitchBook, the report noted that 2023 was the worst year in a decade for firms exiting investments. Quoting unnamed sources familiar with the matter, the report said that buyout firms were still seeking “2021 prices” for portfolio companies, while acquirers and public investors were looking for valuations that account for grim external circumstances.
The year has been marked with high interest rates, a weaker economic outlook, and a largely moribund IPO market, forcing PE firms to take on more debt and increasingly use continuation funds, according to the report.
