Companies seeking to go public or raise capital faced a unique set of challenges in 2023, fueled by recession fears, global election cycles, and fluctuating valuations impacting traditional exit strategies. 

Key trends include: 

  • Alternative exits may take the lead in 2024

The dramatic interest rate hike sent shockwaves through the market, significantly impacting valuations, and widening the gap between buyer and seller expectations. This was suggested to have resulted in a general decline in traditional M&A exits.

While there are signs of improvement in the IPO window, overall exit markets remain muted. This is prompting private equity to explore alternative liquidity solutions, such as secondaries, continuation vehicles, and debt financing. These alternative exit strategies may take center stage in 2024 as traditional M&A activity recovers.

  • Proactive strategies contribute to a brighter outlook

Despite these near-term challenges, we have observed positive signs for the long-term. The key to navigating this shifting landscape lies in a proactive approach. Forward-thinking private equity firms are focusing on value creation strategies, particularly operational improvements, to counter the headwinds from rising interest rates.

This shift towards operational efficiency may not only position companies for a stronger future but can also make them more attractive exit candidates when traditional M&A activity rebounds.

What’s next for growth company exits in 2024? Watch below >

Paths to liquidity

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