Private equity portfolios typically would see about 25% of investments being harvested, realizing cash each year to fund new investments or distributions, Rocha Scaff said. The rate has dropped to 12% to 13% in the past three years and it’s likely to be the case for 2025, she said. It also means the average holding period has increased to six years on average, from about four years, she added.
The industry is now coping with interim solutions including partial stake sales in portfolio companies, while GP-led solutions also provide optionality for investors, Rocha Scaff said.
Meanwhile, Neuberger Berman is seeing European or non-US investors starting to pause or slow down their allocations to the US, Rocha Scaff said. US economic activity has been decelerating based on live feeds from managers in their portfolio companies, she added.
“It’s not just the international issues that are visible here. People also pay attention to domestic issues,” she said. “The tax bill is becoming more and more of a concern.”
