Private Equity Holding Periods: Why Exits Are Taking Longer

How long do private equity firms hold companies?

Global buyout assets exited in 2025 had been held for about seven years on average, according to Bain.¹ Preqin’s separate global private equity series recorded a 6.1-year average hold at exit in 2024.⁶ With Intelligence reported a 5.4-year global median hold at exit for 2024.⁹ CapitalPad compares these benchmarks below with their periods and definitions intact.

Compiled and compared by CapitalPad Research using the providers identified in each row. At-exit measures exclude unsold companies; still-held measures describe the remaining inventory. The rows do not form a continuous historical series.

What a holding period measures

An exit may take the form of a sale to a strategic buyer or another sponsor, an IPO followed by a sell-down, or a transaction that gives existing investors liquidity while the sponsor remains involved.

The familiar three-to-five-year range describes the traditional ownership window. StepStone used that range in its 2021 investor guide, while a 2015 Harvard Business School survey found that PE firms commonly modeled investments over five years. Those expectations help explain why a roughly seven-year realized hold changes the investment experience.^{4, 5}

A company’s hold is also different from a fund’s life. A typical buyout fund has a ten-year term, with capital invested over its early years and returned as individual companies exit. The last holdings can keep investors committed well beyond any one company’s original target.

CapitalPad is a private equity co-investment group that helps accredited investors invest in lower middle market private equity on a deal-by-deal basis.²⁸ CapitalPad Research examines the market conditions behind those investment decisions, including how long capital may remain invested and what can delay its return.

The evidence that private equity holding periods are getting longer

Private equity holding periods have lengthened within comparable provider series. In Preqin’s North American buyout data, average holds at exit were about 4.9 years over the decade through 2013 and 5.8 years over 2014–2023. The 2023 reading reached 7.1 years through mid-November, the longest in that dataset since at least 2000.⁷

With Intelligence’s global private equity series shows median holds at exit increasing from 4.3 years in 2017 to 5.4 years in 2024, followed by the first annual decline in five years in 2025. A recent decline therefore sits within a longer period of extended ownership.⁹

PitchBook’s October 2025 cohort analysis found that only 16.6% of U.S. private-equity-backed companies acquired in 2021 had exited within four years, versus 32.3% of companies acquired in 2017 at the same age. Among older investments, 37.1% of the 2017 cohort remained unsold near the end of year eight, compared with 26.4% of the 2012 cohort at the same point.¹²

Why a falling private equity median can coexist with an aging backlog

A lower median holding period among private equity exits does not establish that the unsold backlog has cleared. With Intelligence recorded a decline in the global median hold at exit in 2025.⁹ Bain described successful exits as concentrated among stronger assets and found that almost 40% of buyout-backed companies had been held for more than five years.¹

CapitalPad Research’s comparison of Bain and With Intelligence points to a selective private equity exit recovery: companies that sell can register shorter holds while older companies remain in portfolios. The evidence supports extended ownership without requiring every holding-period measure to rise every year.^{1, 9}

The private equity exit backlog is large and getting older

Bain’s 2026 Global Private Equity Report put the global unsold buyout inventory at roughly 32,000 companies, with $3.8 trillion in unrealized value as of Q2 2025.¹ Bain’s 2025 report had counted about 29,000 companies worth $3.6 trillion.¹⁵ In June 2026, Reuters reported a newer Bain conference estimate of approximately 33,000 unsold companies.³

Compiled and compared by CapitalPad Research. Underlying figures: Bain’s global buyout inventory reports and Reuters coverage of Bain’s June 2026 commentary. The later count is not a new annual-report observation. Company counts exclude add-ons where stated by Bain.

The size of the inventory matters, but its age is just as consequential. McKinsey reported that more than 16,000 buyout-backed companies had been held for over four years in 2025. Those companies made up about 52% of the global inventory, the highest share on record and roughly ten percentage points above the preceding five-year average.⁸ Bain separately found that almost 40% of buyout-backed companies had been held for more than five years in its 2025 data, up from 29% in 2019.¹

The U.S. inventory was also aging. PitchBook counted nearly 12,900 PE-backed companies at Q3 2025 and reported a 3.9-year median age for still-held assets, up from 3.0 years in 2022. The unusually large 2021 and 2022 acquisition cohorts can keep that median relatively low even while older holdings remain unsold.^{12, 15}

The backlog therefore requires a sustained flow of realizations. A strong year of exit value helps, but a handful of large sales cannot by itself resolve the ownership duration of thousands of remaining companies.

Why are private equity holding periods getting longer?

Private equity firms are holding companies longer as valuation gaps, financing constraints, and uneven buyer demand make exits harder to complete. Bain’s June 2026 midyear report described renewed pressure on exit activity.² Sellers need a price that justifies the investment; buyers need a business and financing package that work at that price. When those requirements do not meet, ownership continues.

Buyout exit value recovered while exit count fell

Bain reported that global buyout-backed exit value rose 47% to $717 billion in 2025, while exit count fell 2% to 1,570 transactions. Seven exits above $10 billion contributed $155 billion, or 22% of the total value.¹ CapitalPad Research’s analysis distinguishes a recovery in the dollar value of exits from a recovery in the number of companies sold.

Corporate buyers were an important source of liquidity: strategic exit value grew 66% in 2025. Sponsor-to-sponsor exit value grew 21% globally, but the North American result depended heavily on the Aligned Data Centers transaction. Without that deal, the region’s sponsor-to-sponsor exit value would have fallen 19%.¹

That concentration matters to a company approaching sale. The existence of a few willing buyers at the top of the market says relatively little about the buyer pool for a different business, sector, or size band.

Purchase prices and financing leave less room for an exit

McKinsey reported that the median PE entry purchase multiple increased from 11.3x EBITDA in 2024 to 11.8x in 2025. Companies acquired at demanding valuations need enough earnings growth to support an acceptable sale price, while buyers must also account for the cost and availability of debt.⁸

Bain’s June 2026 midyear report described renewed pressure from software repricing, private-credit stress, and geopolitical uncertainty. Exit momentum had stalled again, and stronger assets continued to account for much of the activity that did clear.²

Investors want distributions without steep valuation cuts

Bain reported that private equity distributions remained below 15% of net asset value (NAV) for four consecutive years through 2025; the reading for the twelve months through Q3 2025 was roughly 14%. Low distributions limit the cash investors have available for new commitments.¹

Yet cash at any price is not necessarily acceptable. Bain’s June 2026 midyear report cited an Institutional Limited Partners Association (ILPA) poll in which most limited partners (LPs) began losing confidence in a general partner (GP) when a full exit occurred at a discount of more than 5% to the last valuation mark. That helps explain why pressure to sell does not always translate into a completed transaction.²

What a longer holding period does to private equity returns

The same private equity investment multiple produces a lower annualized return when it takes longer to earn. An investment can return twice the original equity capital and still deliver a very different annualized result depending on whether the proceeds arrive in year four or year eight.

CapitalPad calculates that a 2.0x investment multiple produces an 18.9% annualized return over four years and 9.1% over eight years. The calculation assumes one initial investment and one payment at exit, before fees and taxes, with no interim distributions or additional investment. The investment doubles in either case; the longer hold spreads that gain over twice as much time.

Actual cash flows can change the result. Interim distributions return some capital earlier, additional investment changes the amount at work, and fees affect what the investor ultimately receives. The illustration isolates the effect of time; INSEAD’s work on private equity performance measurement explains why IRR is particularly sensitive to the timing of cash flows.²¹

Longer ownership needs continued value creation

A longer private equity holding period can be worthwhile when the business keeps growing and the eventual proceeds compensate investors for waiting. The question is how much additional value those extra years produce.

Bain’s analysis of buyout fund vintages from 2000–2015 found that fund-level internal rate of return (IRR) began to stagnate around year seven and declined afterward, while median total value to paid-in capital (TVPI) flattened after year eight. Those are observations about fund performance over time, rather than a rule that any individual company should be sold in year seven.¹

Higher entry prices and financing costs add to the operating challenge. Bain’s 2026 midyear illustration showed that a deal once able to reach a 2.5x return over five years with 5% EBITDA growth might now require 12% growth. A delayed exit adds another reason to test whether the company can continue increasing earnings and cash flow.²

An IPO may only begin the exit

An initial public offering (IPO) does not necessarily end a private equity investment’s holding period. The Long Goodbyes study examined 564 fund investments in 330 U.S. PE-backed companies that went public between 1995 and 2014. Only 3% of general partners fully exited at the IPO. Average post-IPO investment duration was around three years, even though lockups typically ended after six months.²²

Full exits took an average of 2.5 years after lockup expiry and involved 5.5 separate sales. In about a quarter of deals, GP holdings had barely changed five years after listing. The authors estimated that extended post-IPO ownership cost LPs an additional 20% in management fees and carried interest, at least $10 billion across the sample.²²

Private equity holding periods vary by sector and deal size

Private equity buyout holding periods differ across sectors. Preqin Pro data reported by S&P Global in December 2025 put telecom and media at 7.27 years, energy and utilities at 6.96, industrials at 6.34, and consumer discretionary at 6.28. The analysis associated longer holds with larger companies requiring larger financing packages at exit.¹⁸

In the December 2025 Preqin Pro reading reported by S&P Global, telecom and media had the longest average private equity buyout hold among the four sectors shown, at 7.27 years.¹⁸

Preqin Pro’s earlier June 2025 sector snapshot, reported by S&P Global, illustrates how the sample can change the ranking. Industrials averaged 7.5 years, consumer discretionary 6.6, and healthcare 6.4; telecom and media stood at 9.2 years on a single deal. A sector average can inform a view of the market without becoming the target hold for a particular company.¹⁹

Continuation funds can provide liquidity while the sponsor keeps the business

A private equity continuation fund allows a general partner (GP) to transfer a portfolio company from an existing fund into a new vehicle it manages. New investors supply capital, while existing limited partners (LPs) may take cash or roll their interests into the new vehicle. The transaction can end one investor’s holding period while extending the sponsor’s involvement with the company.²⁰

Jefferies reported $240 billion of global secondary-market transaction volume in 2025, up 48% year over year. LP-led transactions accounted for $125 billion and GP-led transactions for $115 billion. Continuation vehicles comprised the majority of GP-led transactions; total secondary-market volume includes a wider range of transactions.²⁰

Jefferies’ global secondary-market series rose from $132 billion in 2021 to $162 billion in 2024 and $240 billion in 2025. These totals include both LP-led and GP-led activity.²⁰

Jefferies reported that general-partner-led secondary volume grew 53% in 2025 and represented 48% of the global secondaries market. Nearly 80% of the top 100 sponsors by assets under management had completed a continuation vehicle transaction by 2025.²⁰

Continuation funds create meaningful liquidity options, but they do not necessarily move a company out of private equity ownership. Existing investors may receive proceeds while a new group accepts the next holding period.

Bain found that continuation vehicles grew 62% in 2025 and remained below 10% of total private equity exit value.¹ Jefferies put GP-led secondaries at approximately 14% of sponsor-backed exit volume in 2025.²⁰ CapitalPad presents these as separate measures: the transaction category and the exit-market denominator both differ.

What longer holds mean for lower middle market investors

A global buyout average helps set expectations, but the actual holding period depends on the investment being made. A smaller operating business may have a different buyer pool, debt requirement, and route to exit from a large sponsor-owned company.

Bain’s midyear deal-cost index, for example, covers U.S. large corporate LBOs with more than $50 million in EBITDA. CapitalPad’s stated target businesses have $5 million to $30 million in enterprise value and $1 million to $7 million in EBITDA. Those are materially different transaction sizes, even though both are exposed to financing costs, valuation gaps, and buyer caution.^{2, 28}

Bain also observed greater buyer interest in companies with physical or labor-intensive operations and domestically oriented revenue in mid-2026. Those characteristics appear in many lower middle market businesses, but they do not establish a shorter holding period or a guaranteed exit.²

The investment structure determines how investors experience the wait

The University of California’s investment office disclosed that private equity partnerships generally take 10–14 years to fully liquidate. A fund commitment therefore exposes an investor to the portfolio’s distribution schedule, including its longest-held positions.²⁶

Deal-by-deal investing makes the company and its proposed exit plan visible before the commitment. It also concentrates the holding-period risk in that business. Investors can assess the sponsor, entry price, financing, and likely buyers in advance; they still need the capacity to remain invested if the exit takes longer than planned.

Through CapitalPad, accredited investors can invest in lower middle market private equity on a deal-by-deal basis, reviewing the specific company and transaction before deciding whether to invest alongside an independent sponsor.²⁸ For benchmarks on entry pricing and deal size, see CapitalPad Research’s lower middle market private equity statistics.

A private equity target exit date needs a credible plan behind it

CapitalPad’s practical conclusion from the holding-period research is to evaluate the exit plan alongside the target date. Bain’s 2025 data show extended buyout holds, a substantial inventory of older companies, and a recovery concentrated in larger exits.¹ Investors need to understand how the business and financing would hold up if ownership lasts longer than planned.

A five-year target is most useful when the investment case also explains what happens if the exit arrives later. That means understanding who could buy the business, how the buyer would finance it, and whether earnings and cash flow can keep growing during an extended hold.