EQT’s Sinding Says Buyout Firms Hunt for New Ways to Exit

May 17, 2024 | News

A growing number of private equity giants are considering new ways of exiting their portfolio companies — from private IPOs to selling their stakes to rivals – as they hunt for ways to return cash to investors, according to one of Europe’s largest buyout firms.

Some private equity firms are under pressure from their limited partners to consider these novel options, EQT AB Chief Executive Officer Christian Sinding said at the Qatar Economic Forum.

“Right now, there’s a big push for various forms of exit in our industry from all of our companies.” Sinding said in an interview with Bloomberg Television. “We’ve invested a lot of capital in our whole industry but we haven’t been able to do enough exits.”

Private equity relies on the cycle of raising money to make acquisitions, exiting via a sale or IPO and then returning money to investors. Buyout firms then go out to many of the same investors and ask for more funds to do it all again.

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That’s all been disrupted in recent years with equity capital markets on ice and dealmaking in a slump. That’s why buyout firms are now considering options like a private IPO, where early backers of a company can transfer their shares to new investors.

Read more: Private Equity Dealmakers Bemoan Exit Woes as Price Gaps Persist

Sinding said as more private equity giants exit their portfolio companies it will offer evidence that valuations in private markets are healthy. He also said EQT might pursue deals in the Middle East over time.

The CEO added that his firm is focused on making investments in industries that will provide the infrastructure underpinning the growth of artificial intelligence, a technology that he believes will ultimately have the same impact on the world as the introduction of Apple Inc.’s iPhone.

Source: Alternative Yahoo Finance

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