ANALYSIS: Private Equity Eyes SPACs, Direct Listings Over IPOs

Unhappy with the performance of large initial public offerings in recent years, private equity will increasingly seek alternative exits for its startup investments in 2020.

Private equity, including venture capital, has poured money into startups, particularly those in the technology and e-commerce sectors. However, long-term stock holdings are not part of their business model: They need an exit.

The two most popular exits for private equity have long been mergers and acquisitions and public offerings. Two options likely to draw increased attention in 2020 are SPACs and direct listings.

Special Purpose Acquisition Companies

Increasing volatility and uncertainty in the IPO ...