I periodically update the private equity portfolio company holding periods data study to track this trend over time.
The longest median holding period for private equity owned portfolio companies was 5.6 years, back in 2014. This is intuitive because 5 or 6 years prior to 2014 represented those portfolio companies acquired at the peak of the market, just before the last recession. Consequently, the holding periods were extended, allowing more time to recoup from ill-timed acquisitions.
Since 2014, there has been a slight-but-steady downward trend in portfolio company holding durations – until now. The last data point on the right (2019 YTD, through August), represents the first trend reversal for this metric since 2014. Based on the last 5 years, I was expecting to report a median holding period of 4.6 years, but instead, the data shows:
2019 YTD Median Holding Period = 4.8 years