Eva Davis Discusses The Decrease in Private Equity Exit Volume for 2022 in FundFire

Winston & Strawn Transactions Chair Eva Davis discussed the low private equity exit volume for 2022 and factors that likely contributed to the decrease from previous years with FundFire. While the industry reached a record exit volume of 2,990 last year, exits through this year’s third quarter sit at 1,360. 

“Dealmakers still get their valuations and transaction information from the public markets, and valuations are down because of macro conditions, the possibility of a recession and business uncertainy,” Eva said. “And now we see credit is not available in the same ways it was in the past, or it’s more expensive. A large number of buyers… still need to use debt to do leveraged buyouts.”

Eva continued by stating that last year’s high exit volume has also influenced the results of 2022, noting that “if any private equity fund had a portfolio company that was doing well, it exited in 2021. A lot of the inventory got cleared out. There was not a lot in the portfolio ready for exit this year.”

She said that while there is no answer to when exit volume will rebound, many deals have been prepped to move quickly when the time comes. 

“We hope that’s sometime next year, maybe in Q2, Q3 or Q4,” she said. “The data rooms are ready. The bankers and lawyers are hired.”

Read the full article “Private Equity Exits Tumble to Decade-Long Low as Managers Hold Back” (subscription required).