Private Equity Holding Period and Value Creation

Posted By: Clear Li, Topher Abt

Your typical source of finance literature would tell you that the standard holding period for a private equity investment is between three and five years. However, this theory has been contested lately, most notably by a PitchBook article positing that the 2017 year-to-date average holding period in the U.S. is 6.17 years.

In this week’s article, we aim to discuss whether prolonged holding periods have become the “new normal” and examine whether there has been a fundamental shift in the private equity landscape. We also interviewed Michael O’Neill, Director at Stone Arch Capital, who offered some of his insights from the perspective of an industry practitioner.

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