Schroders Sees Private Equity Exit Strategies Reshaping Industry

Continued ownership structures favored by private equity firms in a challenging exit environment could make it harder for larger sponsors to pursue new deals as they ultimately transform the industry’s buyout model, according to a study by Schroders Plc.

It’s not uncommon for mid and large buyout firms to purchase assets from smaller funds, but now even those at the bottom end of the market are turning to continuation vehicles so frequently that it may disrupt this type of chain buying within the PE industry, according to Schroders Capital, a division of the London-based asset manager.

Continuation vehicles have ...