Volume of exits increases in October

Exiting a portfolio company is certainly challenging in Europe right now. The market is inelastic due to the slow economy and other externalities. In addition, purchases made in the boom years have left little time for succession planning and leave some GPs stranded with their holdings.

September was the slowest month for exits in the last 12 months leading up to November. One of the largest exits on record this year was the €700m trade sale of Triton's German chemicals company Ruetgers Chemicals. Trade sales continue to be the most popular exit route for European private equity holdings. Asian corporate buyers become increasingly interested as well. Ruetgers, for example, was acquired by the Indian industrial group Rain Commodities.

Besides trade sales, secondary buyouts continue to be a common exit route. In August, HgCapital sold British pharmaceuticals company Mercury Pharma to Cinven for £465m, making it the largest on-the-record secondary buyout this year.

An increasing number of exits could be a positive sign for the European market, but edging closer to year-end also means that some transactions need to be wrapped up, causing volumes to go up.

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