Trade sales remain the favoured exit-route
Australasian PE funds continue to focus on buyouts, with buyout funds representing 23% of funds closed and 62% of total private capital raised in FY21.
Subsequent exits primarily consist of trade sales (52% of FY21 exits) and sales to a General Partner (GP) (15% of FY21 exits). Notably, there were eight buyout exits via IPO (13% of FY21 exits), up from one in FY19 and nil in FY20.
Quarterly volumes by exit type (left) and annual mix of exit types (right)
Activity from buyout exits rebounded sharply in FY21, as PE firms took advantage of heightened valuations and improved market confidence to drive returns via trade sales, GP sales and IPO exits. In particular, IPO exits were up considerably from one in FY19 and nil in FY20, to eight in FY21, attributed to record low interest rates and overall increased market confidence driving stock market returns providing attractive exit value for PE portfolio companies.
Looking forward, inflation and overconfidence in the market is to be considered as PE seek exits over the next 12 months.