Key Takeaways
- • Private equity buyouts posted average holding periods of approximately 6.0–7.0 years in 2025, up significantly from the 5–6 year range observed between 2010 and 2021, reflecting structural shifts in exit strategy.
- • Telecom and media assets recorded the longest holding periods at 7.27 years, while energy and utilities followed at 6.96 years, indicating sector-specific valuation and liquidity challenges.
- • PE firms are extending holding periods through add-on acquisitions (72.9% of all buyouts in 2025), organic growth initiatives, and noncore divestitures rather than pursuing traditional exits, according to S&P Global Market Intelligence analysis.
- • Valuation mismatches between buyers and sellers persist, with many PE firms that acquired assets in 2019–2021 at lower interest rates now holding positions while awaiting more favorable market conditions and reduced borrowing costs.
- • Rising global trade tensions, elevated interest rate expectations, and speculation around Federal Reserve rate cuts are encouraging fund managers to delay exits and hold portfolio companies longer rather than accept current valuations.
Summary
Private equity and venture capital firms are materially extending holding periods across their portfolios, with 2025 data revealing a significant structural shift in exit timelines. According to S&P Global Market Intelligence analysis using Preqin Pro data, buyout assets exiting in 2025 had been held for approximately seven years on average—a substantial increase from the historical 5–6 year holding period that prevailed between 2010 and 2021. Sector performance varied, with telecom and media recording the longest average holding period at 7.27 years, followed by energy and utilities at 6.96 years, suggesting that certain capital-intensive and cyclical industries face particularly acute valuation constraints.
The primary driver of extended holding periods is the persistent valuation mismatch between PE buyers and sellers. Christopher Atkinson, co-chair for M&A and private equity at Katten Muchin Rosenman LLP, noted that firms acquiring assets during the 2019–2021 period at significantly lower interest rates now find themselves holding those positions while awaiting market improvement. Anthony Arnold, private equity co-chair at Barnes & Thornburg LLP, explained that elevated interest rates have reduced both the availability of cheap capital for growth and overall demand for portfolio companies, forcing sponsors to pursue alternative value-creation strategies rather than exit.
Instead of executing exits, PE firms are deploying add-on acquisition strategies, which accounted for 72.9% of all buyouts in 2025—maintaining the five-year average—while simultaneously pursuing organic growth and divesting noncore operations to boost valuations. Arnold stated: "The interest rates have a lot to do with it. You can't borrow as cheaply to fuel the growth, but it also reduces the demand. Cash flows are hurt a little bit when people are having to spend more money on interest rates."
Macroeconomic factors are further prolonging holding periods. Steven Zaorski, partner at Ropes & Gray LLP's asset management group, highlighted that expectations of Federal Reserve rate cuts and rising global trade tensions are encouraging market participants to delay transactions. Fund managers are effectively betting that waiting several months for lower interest rates and improved conditions will yield better exit valuations than accepting current bids, creating a dynamic where few transactions occur despite underlying demand for portfolio company acquisitions.
The primary driver of extended holding periods is the persistent valuation mismatch between PE buyers and sellers. Christopher Atkinson, co-chair for M&A and private equity at Katten Muchin Rosenman LLP, noted that firms acquiring assets during the 2019–2021 period at significantly lower interest rates now find themselves holding those positions while awaiting market improvement. Anthony Arnold, private equity co-chair at Barnes & Thornburg LLP, explained that elevated interest rates have reduced both the availability of cheap capital for growth and overall demand for portfolio companies, forcing sponsors to pursue alternative value-creation strategies rather than exit.
Instead of executing exits, PE firms are deploying add-on acquisition strategies, which accounted for 72.9% of all buyouts in 2025—maintaining the five-year average—while simultaneously pursuing organic growth and divesting noncore operations to boost valuations. Arnold stated: "The interest rates have a lot to do with it. You can't borrow as cheaply to fuel the growth, but it also reduces the demand. Cash flows are hurt a little bit when people are having to spend more money on interest rates."
Macroeconomic factors are further prolonging holding periods. Steven Zaorski, partner at Ropes & Gray LLP's asset management group, highlighted that expectations of Federal Reserve rate cuts and rising global trade tensions are encouraging market participants to delay transactions. Fund managers are effectively betting that waiting several months for lower interest rates and improved conditions will yield better exit valuations than accepting current bids, creating a dynamic where few transactions occur despite underlying demand for portfolio company acquisitions.
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