Exit Drought: When Have Mega-Fund LPs Last Seen A Distribution?
Back in those glorious boom times, buyout firms purchased multi-billion dollar companies on the premise that, after they somehow improve the business, they'd do a big, exciting IPO. That dream is clearly dead for the moment, and gone with it are LP hopes of distributions. If deal flow begins to pick up and buyout shops begin to spend all that "cash" they're sitting on, LPs could be in trouble. I put quotes around "cash" because it isn't exactly in their pockets. It's a commitment, and with very few exits, the money is flowing one way, making it a commitment LPs aren't too excited to fulfill. The last real mega-buyout exit was the $16 billion sale of Intelsat by Apax Partners, Apollo, Madison Dearborn and Permira. That was 14 months ago. Since then, most of the mega-firms have piddled around, selling little things with no disclosed deal value here and there. Meanwhile, four of the firms have experienced an all-out drought for the past year and a quarter. Below, I've taken a closer look at the date of the most recent exits by members of the Private Equity Council, a private equity advocacy organization with the 13 largest buyout firms as its members. They're listed in order of date.
