One can draw conclusions about typical private equity exits from the data on those deals that have ended. Which of the following private equity “exits” is least common?
A. Selling the purchased firm to a strategic buyer.
B. Secondary leveraged buyout involving the sale of a portfolio company to another private equity firm.
C. Bankruptcy and/or reorganization.
D. An initial public offering (IPO) of the purchased fund.
Answer:C
Typical exits include the following: ? Selling the purchased firm to a strategic buyer (38%). ? Secondary leveraged buyout involving the sale of a portfolio company to another private equity firm (24%). ? An initial public offering (IPO) of the purchased fund. Investors are then able to sell their stock in public markets (14%). ? Bankruptcy and/or reorganization, which is less common than perhaps expected given the significant leverage in these deals (6%).