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Private equity exits up 15 per cent in 2003, survey finds

Private equity fund managers reported a 15 per cent increase in exits last year compared to 2002, according to a survey conducted by SCM Strategic Capital Management. The European funds in the sample demonstrated a particularly strong improvement with a 39 per cent increase in realisations. The total value of reported exits across all geographies increased by 41 per cent.

Trade sales were the most popular form of exit in both 2002 and 2003, followed by recapitalisations, write-offs, IPOs and secondary buy-outs. But significantly, the share of write-offs declined from 28 per cent in 2002 to 21 per cent in 2003.

The analysis of the realisations by financing stage showed that buy-out funds surveyed reported an increase in exits by number of almost 40 per cent in 2003 compared to the previous year. This was mostly driven by secondary buy-outs, which were up 200 per cent, and trade sales, which were up by 37 per cent.

In contrast, venture capital funds reported a decline of exits by five per cent in 2003 on a year-to-year comparison. But venture capital firms did also report a decline in the proportion of write-offs by 25 per cent in the same period. The share of IPOs and trade sales rose by 18 per cent each.

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