How Will PE’s Liquidity Crisis Resolve Itself?
With around 29,000 companies held in private equity portfolios, experts say there aren’t enough potential buyers out there to acquire them all. Thus, providing liquidity to LPs in spite of the excess is a systemic challenge. How will it wind up? Dealmakers weigh in.
by Jonathan Braude
Private equity’s liquidity crunch has prompted different explanations over recent years: The denominator factor; the gap between buyer and seller price expectations; macroeconomic
uncertainty, and so on. But last year, at least, the issue could be distilled down to a simple equation: LPs received less money from exits than the $600 billion they were asked to commit to new deals.
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