PE Firms Hoping to Cash Out in IPOs Mull Creative Debt Fixes (1)

Buyout firms are planning to cash out from a string of European portfolio companies in 2025 to return money to clients. There’s just one catch — stock market investors don’t want the debt piles that can come with them.

That’s leading private equity groups to explore ways to clean up these balance sheets, including shouldering part of the burden themselves. One option is to lump debt onto a corporate structure outside the entity being listed, reducing the amount of equity the IPO needs to raise to bring down debt exposure, bankers say.

It’s the sort of financial engineering more commonly ...