PE Tapping Public Market Strength

July 20, 2021 | Hayley Kane, Research Associate

Two charts showing private equity exit activity. Chart subtitle: PE exits and exits via IPO have increased meaningfully YTD. First chart description: Left y-axis for columns shows PE exits by billions of dollars, ranging from $0-450. X-axis shows years 2011-H1 2021. Right y-axis for line shows exit count ranging from 0-1400. 2021 so far has had 676 exits at a value of $356 billion, on pace to beat the records of 1328 exits in 2015 and $421 billion in exit value in 2018. Second chart description: Stacked column chart showing percentage of exits by type from 2011 through H1 2021. At bottom of each column, corporate acquisition, middle category is public listing, and top of column is sponsor acquisition. 2021 has seen a significant increase in public listings so far. Note: Latest available 3Q20 Federal Debt as % of GDP used as proxy for 4Q20 Federal Debt as % of GDP. Chart source: PitchBook; U.S. data as of June 30, 2021.

Private equity exits are set to break record numbers in 2021. In 2020, there were 947 exits worth $367 billion, and in 2019 there were 1,111 for a total $323 billion. Already this year, in the first half of 2021, there have been 676 exits for $356 billion. At this pace, the year is on track to surpass both the previous highs of 1,328 exits in 2015 and $421 billion in exit value in 2018.

Along with the number of exits increasing overall, the percentage of exits via IPO has increased significantly this year. In 2019, the fear of a recession kept private companies from wanting to go public. Once a private company hits the market, PE sponsors keep their shares, now subject to public market dynamics, for an average of three years. Risk of a looming recession or lack of confidence in the public market can deter private company owners from pursuing this path. Alternatively, the increased use of public market exits year-to-date may represent private owners’ more bullish outlook on the market. We will continue to look to leading indicators like private market sentiment to help inform our own market expectations and client recommendations.

Print PDF > PE Tapping Public Market Strength

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Hayley Kane
Research Associate

Get to Know Hayley

Related Content

09.16.2021

Private Credit: Consistency is Key

We are all familiar with adages like “consistency is the key to success” and “excellence is mundane”. For private credit,…

09.08.2021

Taking the PEPP Out of the Eurozone’s Recovery?

Amid concerns over the Delta variant and signs of a sharp slowdown in the global economic rebound, many central banks…

09.01.2021

The Turn of the SKEW

Domestic stock indices have rebounded from pandemic-induced lows exhibited in the spring of 2020 with relative ease, and U.S. equity…

Two-line chart showing unemployment and job openings. Chart subtitle: The number of job openings in the U.S. now exceeds the number of people unemployed. Chart description: Y-axis shows number in millions, from 0 to 25. X-axis shows date from December 2000 to July 2021, labeled in increments of nine months. Blue line shows number of people unemployed. Orange line shows number of job openings, As described in the accompanying text, in recent months, the number of job openings has exceeded the number of unemployed people. Chart source: Bloomberg.

08.26.2021

What Does the Labor Shortage Mean for Inflation?

Employers have faced a number of challenges throughout the COVID-19 pandemic — most recently, a labor shortage. As of the…

Three-line chart showing Consumer Price Index year-over-year growth (representing actual inflation) and 2- and 5-year breakeven inflation rate (measuring difference in yield between U.S. Treasury bonds and TIPS of the same maturity). Chart subtitle: CPI and breakeven inflation rate data can help shape future inflation expectations Chart description: Y-axis shows range of percentages from -6% to +6%. X-axis shows years from 2004 to present (though labeled by year, so final label is 2020). Headline CPI Y/Y is green line; 2-Year Breakeven is purple; 5-Year Breakeven is teal. Labels on chart highlight that Y/Y headline CPI peaked twice after 2008's financial crisis. In 2011, the 5-year breakeven fell below 2-year breakeven as leading indicator of CPI declining and normalizing a year later. Most recently, Y/Y headline CPI running hot again but potentially plateauing and the 5-year breakeven is already below the 2-year breakeven and both potentially plateauing. Chart sources: Marquette Research, Bloomberg; latest available as of August 13, 2021.

08.18.2021

Where is Inflation Headed?

Despite a number of commodity prices, including lumber, corn, and pork, retreating from recent highs, inflation remains a key focus…

Chinese equities were down in July amid new regulatory restrictions

08.10.2021

Chinese Equities Sold Off in July

In 2020, China was a top performer in the global equity market, returning 29.5%. In 2021, however, Chinese equities have…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >