Pension funds and other big institutional investors are examining how to exit private equity stakes in response to the market turmoil triggered by President Trump’s tariffs, the Financial Times is reporting.
Private market giant Blackstone’s share price has fallen by 15 per cent since Trump’s ‘Liberation Day’ on 2nd April, while KKR dropped 23 per cent as markets consume what the new protectionist US strategy means for investments.
The FT reports that some big institutional investors are considering exiting at discounts, a reversal of the expected boost to IPOs some had predicted would follow Trump’s election.
A report from Bain & Co published in March reported a private equity recovery taking shape. But it found that despite a strong run for exits in 2024, both exit value and count remained stuck well below their five-year averages, with both GPs and LPs seeing the exit environment as the biggest impediment to strong returns. The report said: “Even with last year’s rise in exit activity, distributions as a proportion of PE’s net asset value sank to 11 per cent – the lowest rate in a decade and down from an average of 29 per cent from 2014 to 2017.”
