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Chart of the week

Mid-market PE managers less impacted by slowing IPOs

Private equity sponsor-to-sponsor exits have seen notable growth over the past five years, creating a ripe environment for middle market PE managers.

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April 25, 2025 | 2 minute read

% change in private equity exits by channel

Column chart showing the change in private equity exits by channel over the past year and five years. Sponsor-to-sponsor exits saw the greatest increase over both time periods—141% over the 1-year period and 26% over the five-year period. Exits via IPO—a preferred avenue for large-cap PE sponsors—jumped in 2024 but fell nearly 50% over the past five years. The evolution in exits by channel highlights one benefit for middle market PE sponsors: greater exit optionality.

Source: Bain Global Private Equity Report 2025.

  • Recent market volatility has dampened hopes for a short-term recovery in U.S. initial public offerings (IPOs) as firms delay offerings or pursue alternatives.
  • As shown in the chart, private equity IPO exits in 2024 were down -46% versus the five-year average.1
  • The IPO slowdown exacerbates an already constrained exit environment for many large-cap private equity managers who have historically relied on a healthy IPO market for liquidity.
  • Unlike the muted IPO environment, sponsor-to-sponsor sales jumped 141% year over year in 2024 and were 26% above the five-year average.1
  • A slow IPO market alongside strong sponsor-to-sponsor activity may favor middle market private equity managers, who have historically relied less on IPOs for exits versus large-cap peers.1
  • In fact, from 2018–2022, approximately 97% of middle market exits were through sales to larger private equity sponsors or to strategic corporate buyers via M&A activity.2

  • Bain Global Private Equity Report 2025.

  • Preqin.

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