A March 6 Law360 article titled “The Creative Ways PE Firms Are Holding Investments Longer” outlines how private equity firms are increasingly holding onto profitable assets for longer periods. The piece includes insights from Ropes & Gray asset management partner and private equity industry group co-head John Ayer.
While some PE firms have specifically raised long duration funds with this intent, “It’s not so much longer duration funds, but holding individual assets longer is definitely a trend,” said John. “There are a variety of ways to try and look at holding individual assets longer.”
John also discusses asset restructuring funds, which allow PE firms to sell a company or companies to a separate vehicle that has been set up once the original private equity fund is nearing the end of its life cycle. “Those have become increasingly common over the last 12 to 18 months,” he said. “There, sponsors say, ‘… this is a great company, or a great set of companies, and there’s potential value creation over the next four or five years. Selling now, as the fund winds down, is leaving a lot of value on the table.'”
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