Cooper Smith

What’s Included

 * Extended Strategic Planning Horizons: Explore how PE firms are adjusting to longer holding periods by extending strategic planning to 5-7 years, enabling deeper value creation and robust risk management strategies that align with market cycles.
 * Focus on Organic Growth and Cash Flow: Understand the increased emphasis on organic growth and strong cash flow generation in the current economic environment, and the operational efficiency measures that PE firms are adopting to support these goals.
 * Demand for Digital Transformation Leadership: Discover the growing need for executives who can drive digital initiatives, with an emphasis on talent acquisition, cultural transformation, and investment in cutting-edge technology across portfolio companies.
 * Integration of ESG in Investment Strategies: Learn how PE operators are incorporating Environmental, Social, and Governance (ESG) factors into their strategies to meet investor expectations, mitigate risks, and drive sustainable value creation.

Published Research

Operating Trends 2024

What's Included

 * Record Surge in Sponsor-to-Sponsor Exits: Discover why sponsor-to-sponsor (S2S) exits have skyrocketed by 154% in 2024, now representing 68% of total exits for PE-backed companies – more than double last year’s rate.
 * Shorter Holding Periods, Faster Turnarounds: Learn why companies exiting through S2S deals have a shorter holding period than those going public or acquired by strategics, and how it impacts exit strategies.
 * Underperforming Assets in the Spotlight: Uncover why lower-growth companies are more likely to follow S2S exits, with enterprise value (EV) expansion lower than their IPO or strategic exit counterparts.




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"report": "Sponsor-to-Sponsor Exits 2024.pdf",
"excerpt": "Sponsor-to-Sponsor Exits 2024 Excerpt.pdf"
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Sponsor-to-Sponsor Exits 2024

Isabel O'Brien

Sponsor-to-sponsor exits now account for 68% of PE exit outcomes, up from 35% in 2023.

Exits Are Back, But Different

Privitas published its inaugural report, “Sponsor-to-Sponsor Exits 2024” on November 11th, examining major exit trends for the first three quarters of this year. 

According to Privitas data, sponsor-to-sponsor (S2S) exits have dominated the landscape this season, accounting for 68% of total exit outcomes for PE-backed companies with enterprise values over $100 million between Q1 and Q3 2024, up from 35% during the same period in 2023. The median enterprise value in the dataset was $550 million, showing how S2S exits have become a very common exit outcome for large PE-backed companies

The distinction in exit valuations is important – Matthew Wesley, global head of private capital advisory at Jefferies, told The Financial Times that secondary sale-style exits for the private equity sector overall in 2024 are likely just 14% of total exits, up from 4-5% in 2019 and 2020. 

There are a myriad of reasons behind the phenomenon. First, the enterprise values for companies exited to strategic acquirers are, on the whole, smaller than those exited via sponsor-to-sponsor transactions, according to Pitchbook data. Strategic acquirers are also focusing M&A on acquiring capabilities in specific areas such as AI as they choose to sit on cash rather than spend it. 

“With so many private equity transactions happening in any given year, it’s important to segment portco exits by size to really understand the trends in each part of the market,” said Cooper Smith, founder and managing director at Privitas and author of the report.

Additionally, a weakened IPO market has restricted exit options for large cap players. 

“If the IPO market was stronger, we would likely see more exits to public markets and fewer S2S exits,” Smith added.

The report is the first of many from Privitas, a business intelligence firm for private equity operations. Future reports will tackle portfolio company benchmarks using our proprietary Portco IQ index, as well as sector-specific and cross-industry trends. 

Members can read the full report here. The report breaks down S2S trends by sector, holding periods, enterprise value growth, and different value creation strategies.

Daily Insights

This 15-page report examines the value creation strategies of PE-backed technology companies that exited in 2024.

Technology: Value Creation 2024 Report

What's Included

 * Portfolio Operations Analysis: Detailed insights into the three most prominent value creation strategies—Mergers & Acquisitions (M&A), Product Innovation, and Market Expansion—employed by PE-backed technology companies, including their effectiveness, holding periods, and risks.
 * Performance Benchmarks: Key metrics such as enterprise value growth, exit grades, and holding periods, derived from the Portco IQ: Technology Index, offering a data-driven look at the outcomes of each strategy across $1B+ technology exits in 2024.
 * Actionable Insights for Operators: Practical recommendations tailored for PE operating partners and portfolio company executives, with case studies and operators' tips to enhance strategic execution and maximize exit outcomes.




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"report": "Technology Value Creation 2024.pdf",
"excerpt": "Technology Value Creation 2024 Excerpt.pdf"
}




Technology: Value Creation 2024

The 2024 Portco IQ: Technology report benchmarks large PE-backed technology companies across four dimensions.

What's Included

 * Proprietary Scoring and Rankings: Graded ranking of 15 companies based on their performance, with in-depth profiles of leaders, underperformers, and insights into what helps or hurts successful exit outcomes.
 * Benchmarking Across Four Key Dimensions: A comprehensive analysis of recently-exited PE-backed technology portfolio companies, assessing their performance in financial growth, operational efficiency, market positioning, and talent and governance.
 * Detailed Value Creation Insights: Examination of the strategies that drove enterprise value growth, including M&A, product innovation, market expansion, and restructuring, with real-world examples from top-performing companies like QGenda and Exosens.




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"report": "Portco IQ Report Technology 2024.pdf",
"excerpt": "Portco IQ Report Technology 2024 Excerpt.pdf"
}




What's Included

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