Firms turn to dividend recaps for exits

As the exit market continues to be challenging, dividend recaps remain a tempting exit option for private equity firms. Loan volume for dividend recaps is now the highest since 2007, according to research.

As the exit climate remains challenging and many leveraged buyouts are at or beyond the typical equity investment period, more private equity firms are looking at dividend recaps as a way to return money to investors, research has found.  

Fitch Ratings, which carried out the research, said the increase is driven by an improvement in financing conditions in the high-yield bond market and a selective risk appetite among loan investors.

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