Using data from our M&A research database, we analyzed private equity holding periods from 2000 through 2025 to assess emerging trends and shifting exit dynamics.
The median holding period for private equity-backed portfolio companies has now reached 5.8 years, the longest since we have been tracking this metric. This latest data point reinforces the ongoing trend of longer investment durations, and reflects a slight increase since we last did this analysis in July 2024.
In our July analysis, we anticipated that extended holding periods would persist due to a slowdown in exits. This prediction has largely played out, as private equity firms continued to delay exits amid uncertain market conditions in 2024.
This prolonged cycle not only slows capital recycling for LPs but also affects fundraising strategies as firms hold onto assets longer than originally projected. As a result, private equity firms have prioritized bolt-on acquisitions and smaller-scale deals, given the limited near-term macroeconomic visibility during 2024, as we reported in November.
Historical data indicate that private equity firms typically require 4 to 6 years to normalize holding periods upon exit following economic disruptions (like the dot.com bust in 2003, the Great Recession in 2009, and Covid in 2020). These historical events have traditionally increased the median holding period by 1.0 to 1.5 years.
As we move further into 2025, we see evidence that holding periods are approaching their peak, with some upside or flattening to the curve. If economic conditions stabilize, this may indicate a pivot toward renewed exit momentum within the next 12-18 months.
Exits in 2025 have a median hold of ~6.0 years, implying an acquisition date just before Covid, not during or after. These circa 2019 investments, acquired at peak valuations, are pushing up the median hold period. We expect these investments to begin to flow out of the pipeline. Consequently, we would expect holding periods to peak in the back half of 2025 at around 6.0 years, at which point the current bulge in the exit pipeline should see deals coming to market in late 2025 and through 2026. Of course, this is speculative.
A backlog of delayed exits suggests that firms aiming to exit in late 2025 might consider positioning for strategic sale now rather than waiting for what might be an oversupply situation, which might impact valuations broadly.
Additionally, as funds from these exits flow back to LPs there should be more funding available for 2026 capital raising initiatives.
While past market conditions suggested caution with major acquisitions, some firms may instead view the longer holding periods as an opportunity to deploy capital at more favorable valuations. For firms seeking platform acquisitions, this could provide buy-side leverage in negotiations over the next year.