Private equity firms are resorting to buying back companies they only recently took public, in a bid to salvage investments that have struggled to perform on stock exchanges. Firms including EQT, Cinven and Silver Lake have in the past few months either taken private or considered buying back public companies they owned or in which they held a large minority stake.
The tactic underscores the difficulties that buyout groups have had exiting their portfolio companies via the public markets, historically an important way of monetising their largest assets. In 2021, with public markets trading at record highs, buyout houses floated a record 287 companies worth just shy of $140bn, according to Dealogic data. “IPOs sometimes bring their own challenges. There are those examples where the public markets haven’t taken to companies in the way the sponsor would have liked, there has been volatility in the share price or there hasn’t been liquidity for sponsors to sell out,” said Alastair Brown, a partner at the law firm Freshfields Bruckhaus Deringer, who works with private equity group