Pressure for Private Equity exits builds up

Pressure to exit is mounting for private equity investors, with nearly 40 current Finnish portfolio companies now technically overdue compared to the historical industry average holding period. We calculated industry-specific holding periods based on exited PE portfolio companies headquartered in Finland, with revenues exceeding €10 million, between 2005 and 2024.

Key observations from our report:

Currently there are approximately 150 Finnish PE portfolio companies with over €10 million in revenue, of which nearly 40 are already due or overdue the average holding period
In Finland, the historical average PE holding period has been around 5.6 years, with variance across different industries
Most Finnish overdue exits are within business services, construction, and consumer & retail
The estimated number of exits due or overdue in 2024 is 1.5 times higher than the calculated steady annual exit rate
Across Europe, PE funds have accumulated similar backlogs of overdue or postponed exits over the past years
Fund investors’ expectations for returns are adding the exit pressure
The gap between PE fund returns and new commitments also necessitates new exits
IPO is an appealing option for many of the portfolio companies and an attractive exit route for the PE owners
Reopening of the IPO window will provide an appealing exit option for some PE portfolio companies, likely bringing new, interesting, and much-needed companies to the Finnish stock market
The recovering stock market, rising valuations, and improving macroeconomic conditions will create a more favourable environment for exits and M&A activity

Read the full report