What is a common exit strategy for private equity firms working with Evercore?

A common exit strategy for private equity firms hinges on their objectives of maximizing returns on investment while allowing for an eventual exit from their portfolio companies. An initial public offering (IPO) or strategic sale are both viable pathways for achieving this goal.

An IPO enables a private equity firm to offer shares of its portfolio company to the public market, thus converting ownership stakes into liquid assets. This process often provides the potential for a high return on investment if the company has successfully grown and can attract public investors. Additionally, a strategic sale involves selling the company to another corporate entity or private equity firm, often at a premium, which allows the original investors to realize their gains efficiently.

In contrast, while a merger might provide strategic benefits, it does not necessarily ensure a lucrative exit for the private equity firm. Liquidation of assets typically signifies a failure to achieve the desired operational or financial performance and is not a preferred exit strategy. Lastly, a private placement of shares usually involves selling shares directly to a select group of investors rather than the broader market, which may not yield the same level of return or liquidity as an IPO or strategic sale.

Thus, the choice of an IPO or strategic sale as a common exit strategy reflects the emphasis on maximizing returns and ensuring successful transitions out