Navigating exit strategies in private equity

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The private equity landscape is entering a pivotal phase, defined by renewed confidence, shifting market dynamics, and growing pressure to deliver realized value. After several years of delayed exits and recalibrated expectations, the conditions are aligning for sponsors to act decisively — transforming preparation into performance.

Three drivers of increased exit activity

Several factors are contributing to a more favorable environment for PE exits, including:

Backlog of investments ready for exit
The slowdown in deal activity during 2023 and 2024 created a significant backlog of investments, which are now approaching maturity. Many portfolio companies have strengthened their balance sheets, optimised operations, and are positioned for value realisation. With greater market stability and buyer confidence returning, firms are strategically planning exits that strike a balance between speed, value, and timing.
Growing need for liquidity
Limited partners are increasingly focused on liquidity and capital recycling. Lagging distributions over recent years have intensified the pressure to return capital. This is driving sponsors to accelerate exit planning and explore diverse routes — whether through trade sales, sponsor-to-sponsor transactions, or strategic recapitalisations — to meet investor expectations while safeguarding value.
Evolving market conditions for buyers and sellers
Buyers are back in the market, but selectivity is high. Strategic acquirers are targeting assets with strong fundamentals and clear growth pathways, while secondary investors remain active and creative in deal structures. Improved financing conditions and more predictable valuations are giving sellers confidence to move forward, creating a more balanced and competitive exit environment.

Crafting a successful exit strategy for 2026

To succeed in this evolving landscape, private equity firms like yours are approaching exits as a disciplined, multi-dimensional process — one that begins well before a sale is initiated. Preparation for an exit will consider a number of steps, including:

Time your exit strategically: Aim to align exit planning with broader market cycles and buyer sentiment to optimize value realization.
Prepare your portfolio thoroughly: Strengthen operational performance, governance, and growth narratives to appeal to diverse buyer profiles.
Take proactive risk mitigation actions: Use transactional risk solutions such as warranty and indemnity and tax insurance to bring greater certainty and reduce friction during negotiations.
Enhance your people strategy and culture: Address workforce stability, leadership continuity, and retention strategies early to support value preservation and post-close success.
Navigate regulatory and tax requirements: Anticipate evolving frameworks and structure transactions to promote compliance and aim to maximize net proceeds.

How Marsh Risk can help

Specialists within Marsh Risk’s Private Equity, Mergers & Acquisitions Practice collaborate with colleagues from across Marsh bringing together deep experience across risk, people, and strategy to help you realize the full potential of your investments at exit. From managing transactional and operational risk to advising on people strategies, workforce transitions, and organizational design, our businesses work in concert to deliver integrated solutions that drive greater confidence and continuity through every stage of the transaction.

We work closely with PE firms that are unlocking value, managing complexity, and pursuing optimal outcomes — helping sponsors turn opportunity into sustained success in an evolving private equity landscape.

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Article

Navigating exit strategies in private equity

Three drivers of increased exit activity

Crafting a successful exit strategy for 2026

How Marsh Risk can help

Related insights

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Risk in Context Podcast: Maximizing value in private equity exits

Unlocking the strategic power of a portfolio insurance program

Turning pushback into buy-in for portfolio insurance programs

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Navigating exit strategies in private equity

Three drivers of increased exit activity

Crafting a successful exit strategy for 2026

How Marsh Risk can help

Speak with a Marsh Risk representative

Exit Strategies

Related insights

Strategic rollouts start with stakeholder alignment

Risk in Context Podcast: Maximizing value in private equity exits

Unlocking the strategic power of a portfolio insurance program

Turning pushback into buy-in for portfolio insurance programs