What makes a “best exit” for private equity (PE) investors?

This question intrigued Baird Global Investment Banking, so we partnered with H/Advisors Cicero to interview nearly 100 senior PE professionals about their best exit from the past 18 months and how those sponsors executed on value-building practices and strategies throughout their hold periods to deliver outsized returns. The resulting report, PE Best Exits: Driving Value Through Changing Markets, outlines the findings of these interviews.

At the core, our research demonstrates that financial sponsors increased the value of their investments in many ways and at every stage. From acquisition, throughout the hold period and including the exit process, PE owners carefully considered several levers to create a must-own asset with strong appeal to buyers, resulting in a compelling median exit multiple of 15x. While highly favorable M&A market conditions were clearly a contributing factor around these best exits, it’s clear that savvy investment strategy, thoughtful execution, and sophisticated exit processes also helped to drive significant value creation.

While we now enter a much more challenging period for financial sponsors, the findings reveal many ways that PE firms are creating value on a sustainable basis. Furthermore, PE investors note that challenging markets provide new opportunities for them to generate value going forward, demanding a renewed focus on the core operational and execution tactics that help drive growth in any economic cycle.

Download a copy of the report using the submission form.