Private equity exits in the CEE: An exploratory analysis of exit routes and holding periods

journal article - other

English

Selecting a suitable exit strategy with regards to exit route and timing plays crucial role in achieving the maximum return on investment for a private equity investor. We aim to contribute to the developing literature examining private equity exit strategies by investigating this research topic in geographical means of central and eastern Europe (CEE), by applying new extended dataset and by investigating the cross-border aspect of private equity exits in the said region. By investigating 847 Private equity exits over 22 years in 19 countries of the CEE we find that private equity investors tend to prefer divesting by trade sales over secondary buyouts or via an IPO. They also tend to prefer selling the portfolio company to a foreign investor over a domestic one. Researching the pre-exit holding period we find that on average private equity investors tend to hold their CEE portfolio companies for approximately 5 years, however, our sample shows a fairly high levels of volatility which could further support findings of earlier researchers arguing that PE investors tend to use the “windows of opportunity” and can prove time-flexible when they see an ongoing opportunity for additional value creation.

private equity, IPO, trade sales, secondary buy out, divestment

BÍLEK, M.

15. 3. 2024

2336-6508

Trends in Economics and Management

18

42

Czech Republic

9

19

10

https://trends.fbm.vutbr.cz/index.php/trends/article/view/663