25 years: Private equity & banking
In order to have a sustainable business, a fund manager needs to periodically raise a new fund; and in order to do this he needs successful exits. Gavin describes the four exit options and the benefits of each.
In order to have a sustainable business, a fund manager needs to periodically raise a new fund; and in order to do this he needs successful exits. Gavin describes the four exit options and the benefits of each.
11 mins 28 secs
Having an exit as a required component of investment strategy, is one characteristic of private equity investment which makes it unique as an asset class. The four exit options available are trade sale, stock market exit, sale to another fund or financial sponsor and sale back to the company or shareholders. “Grooming for exit” is achieved by keeping an eye on what the required profile of the company needs to be by exit time; and working towards this.
Key learning objectives:
Outline the features of the four exit options
Understand how grooming for exit is achieved