What a Nine-Year Private Equity Exit Backlog Means for Portfolio Companies
Longer holding periods give sponsors and management teams more time to improve a business. They also make it harder to rely on the market to solve the problem.
Welcome back.
A recent Wall Street Journal headline caught my attention: at the current pace of exits, it would take roughly nine years to clear the backlog of U.S. private-equity portfolio companies.
As of June 30, about 13,500 U.S. companies were held in private-equity portfolios, including nearly 4,000 that had been held for six years or longer.
Reuters has estimated that the global backlog is approximately 33,000 companies and that average holding periods have extended to roughly seven years.
The nine-year figure is not a literal forecast. But it captures something many sponsors and management teams are already dealing with: exit timelines are stretching, and waiting for valuations to recover may not be enough.
Leadership teams cannot control financing markets or buyer appetite. They can control what the business looks like when the market opens.
A longer holding period creates more time to improve margins, reduce customer concentration, strengthen the management team, simplify the operating model, or build a more credible path to growth.
That does not mean every company needs a major transformation. But if buyers and sellers disagree on value, another year of ownership only helps if the company uses it to improve earnings, reduce risk, or make future performance more believable.
The practical question for leadership teams is:
What could we accomplish over the next 12 to 24 months that would materially increase a buyer’s confidence in this business?
Quick Reader Poll
Field Notes: Highland Ventures
This month’s Field Notes revisits Maven’s work with Highland Ventures, a portfolio of retail businesses and real estate holdings.
Highland expanded its Marco’s Pizza business to more than 135 locations in five years. That rapid growth also allowed operating inefficiencies to develop and begin affecting profitability.
Maven conducted a comprehensive profit diagnostic across the business, identified immediate opportunities, and then performed deeper analysis of the largest and most promising areas. The work concluded with a detailed roadmap the executive team could use to turn those opportunities into results.
It is a useful example of a common mid-market issue: when a company grows quickly, value can begin leaking from the business if the operating model and management systems do not keep pace.
Read the Highland Ventures case study
Consultant Spotlight: Huntley Tarrant
I also wanted to highlight Huntley Tarrant, who I first worked with at Bain in Dallas.
Since then, Huntley has held senior operating roles across private equity, enterprise software, fintech, and fast-growing companies. She has led strategic programs, managed large P&Ls, supported M&A integrations, and served as COO, CFO, and President.
Huntley has recently been working with Maven on strategy projects, including AI-readiness initiatives for mid-market clients.
She is particularly valuable when a company understands its priorities but is struggling to translate them into clear ownership, operating discipline, and consistent execution. She brings both a consultant’s structured thinking and an operator’s understanding of what it takes to make a plan work.
Read Huntley Tarrant’s consultant spotlight
Video Spotlight: Profit and Operational Improvement
This month’s video answers a question we hear frequently: What drives profit and operational improvement, and how is Maven’s approach different?
The work is broader than simply cutting costs. It starts by understanding where value is leaking from the business, which opportunities are large enough to matter, and what changes can produce sustainable results without undermining growth.
Watch the profit and operational improvement video
How Maven Helps
Maven helps mid-market leadership teams diagnose performance issues, prioritize the highest-value opportunities, and create an actionable roadmap the management team can execute.
If your company is working through margin pressure, operating complexity, or a longer-than-expected ownership timeline, we would be glad to compare notes.
Thanks for reading.
Longer holding periods will create pressure for some companies and opportunity for others. The difference will often come down to what the leadership team does with the additional time.
Onward,
Mark Hess
Founder, Maven Associates
Discussion Question
If you had two additional years before a sale, what would you work on first to make the business more valuable?
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For Consultants
Know someone who thrives in mid-market strategy and operating-improvement work?
Maven is always interested in connecting with experienced independent consultants, especially former Bain, McKinsey, and BCG consultants interested in focused work with mid-market companies.