PE’s Exit Pain Risks Becoming Structural, Partners Capital Says

Payouts from private equity firms are running at about a third below the norm, raising the question of whether cyclical problems exiting investments are becoming structural for larger players, according to investment office Partners Capital.

Private equity used cheap credit to buy assets from 2020 through 2022, leaving them with less money to pay out to investors after borrowing costs rose and valuations fell. Distributions from the PE portfolios the company has invested in have dipped to about 15% annually from about 23% on average, said Euan Finlay, head of Europe Middle East and Africa at Partners Capital.

“Our ...