The obstacles have multiplied in recent years:
- coûts de financement élevés,
- volatilité des marchés,
- uncertainties about input costs
- and commercial tensions contribute to complicating sales decisions.
Result: several funds had to delay their exits or review their transaction conditions.
Paradoxically, if the total number of exits fell by 15% in 2025, their value increased by 41%, driven by larger-scale transactions. This dynamic reflects an increased selection of assets put up for sale and a preference for the strongest files.
Think about the exit from the entrance
One of the most distinctive practices of successful firms is to integrate exit thinking from the moment of acquisition.
Rather than treating the sale as a separate event, they build their investment thesis in parallel with their planned exit strategy. They review this strategy every six to twelve months and formalize a sale preparation plan in the 12 to 18 months preceding the planned sale.
This approach requires close coordination between transactional teams and operational partners, as well as rigorous monitoring of portfolio performance data. It is resource-demanding, but makes it possible to reduce value losses at the end of the cycle and increase certainty of execution.
Governance dedicated to exits
The most advanced firms do not manage their exits on a case-by-case basis. They plan them at the portfolio level, aligning each transaction with the fund’s overall liquidity objectives.
Some have even set up a dedicated exit committee, made up of fund management, transactional partners and members of the operational team. This committee evaluates the maturity of each portfolio company every quarter using a standardized evaluation sheet.
These firms also set explicit objectives for distributions on paid-up capital (DPI) to guide the pace and sequence of disposals, so as to smooth distributions and avoid being forced to sell several assets simultaneously in unfavorable market conditions.
Map potential buyers
Identifying potential buyers at the start of the investment cycle gives a significant advantage at the time of sale. Firms that practice this systematic mapping maintain ongoing relationships with the management of targeted buyers throughout the holding period, sometimes going so far as to share updates on the progress of the asset.
The positioning varies depending on the type of buyer: an industrial buyer will be sensitive to synergies and complementary activities, while an investor will instead look for value creation potential that has not yet been exploited.
In the current context, several firms indicate that American customs duties have dampened the interest of initially targeted foreign buyers, pushing them to refocus their universe of buyers towards national investors.
Faced with this growing uncertainty, the main investors are now preparing several exit routes in parallel:
- IPO,
- additional acquisitions to gain size,
- or extension of the holding period accompanied by a new phase of value creation.
Create value
Growth and profitability remain the main levers for a solid valuation at the time of exit. In Europe, assets growing at more than 25% per year sold at a premium of around 50% over those growing at less than 5%. About 54% of overall revenue growth in a private equity deal would be attributable to value creation initiatives, compared to 32% from multiple expansion.
Firms develop detailed value creation plans (VCPs), focused on a small number of key indicators – order intake, recurring revenue, customer loyalty, margin improvement – which can be validated by buyers during due diligence.
Notable fact: some firms deliberately leave some opportunities for value creation pending. At the time of sale, they present a second phase of their VCP as a credible trajectory for the next buyer, thus strengthening the attractiveness of the asset.
Performance sprints
In the 12 to 18 months preceding a sale, firms can launch targeted initiatives to accelerate the visible growth dynamic. These actions – price adjustments, efficiency gains, improvement of sales processes – aim both to capture additional value for the seller and to highlight opportunities for the future owner.
Growth initiatives, to produce their effects at the time of exit, generally need to be launched two years in advance (and even earlier). Cost reduction measures can be introduced later in the cycle. The potential impact is considerable: structural value creation can increase equity value by 20% to 50%, while these late sprints can add another 10% to 25%.
AI, a new sales asset
A relatively recent phenomenon is now emerging in due diligence processes: buyers systematically assess the maturity of target companies in terms of artificial intelligence (AI). They examine how it is integrated into key functions (marketing, sales, finance, product development) and what risks are associated with it.
However, many portfolio companies do not yet have a coherent AI strategy. Obstacles are common:
- poorly defined sources of value,
- a lack of specialized talent,
- insufficient data,
- and fragmented deployments which have not progressed beyond the experimental stage.
The role of external advisors
Investment banks and specialist advisors also play an increasingly central role. They help refine sales arguments, conduct market and customer analyses, and stress-test business plans. They also support management teams in their preparation for discussions with buyers.
Carrying out a due diligence review of the seller by an independent third party has become common practice to strengthen the credibility of the sales file. These reports should ideally quantify the improvements made during the holding period and include a forward-looking analysis of market prospects and customer dynamics.
