LONDON – Private equity funds have struggled to offload investments made before the financial crisis and are taking longer to pay out to investors, research showed on Wednesday.
Data from research firm Prequin showed that companies sold by funds in 2012 were held for an average of 5 years, compared to an average holding period of 3.9 years for companies sold in 2008.
"Fund managers are still struggling to sell investments for a sufficient profit that were purchased at peak prices during the buyout boom, and consequently are holding portfolio companies for longer," said Ignatius Fogarty, Head of Private Equity Products at Prequin.
Just 33 percent of the capital investors chipped into deals made in 2007 has been returned in the last six years, compared to a 95 percent pay back rate in the six years after 2001.
(Reporting by Clare Hutchison; Editing by Louise Heavens)