LONDON — Private equity firms in Europe own about 5,400 companies, from Dutch laboratory suppliers to Spanish dental chains to German software makers, and the median one has been owned for 6.3 years, the longest in the industry’s history. The firms bought them with a plan to sell within five. The buyers have not shown up.
Exits by European buyout firms, through sales to other companies, to other funds or on stock exchanges, totaled about 118 billion euros in the first nine months of the year, according to data compiled by a London research firm, Pevara. That is less than half the pace of 2021 and leaves the industry holding an estimated 1.1 trillion euros of unsold investments, a record. Initial public offerings, once the glamorous way out, raised less than 9 billion euros for private equity-backed companies on European exchanges this year.
The gap has been filled by a kind of deal that did not exist a decade ago. In a continuation fund, a firm sells a company from an old fund to a new one that it also manages, bringing in fresh investors and giving old ones the option to cash out. Such deals in Europe reached 41 billion euros this year, roughly a third of all exits. Keswick Partners, a London firm, last month moved a Dutch laboratory-equipment company it has owned since 2017 into its third continuation vehicle, valuing it at 2.4 billion euros.
“We would have preferred a sale. Everyone would have preferred a sale,” said Rupert Fenwick, Keswick’s managing partner. “But the strategic buyers are waiting for rates, the other funds are waiting for us to blink, and the stock market wants a 30 percent discount. A continuation fund is not a failure to sell. It is a decision not to sell badly.”
The investors who put money into private equity funds, including insurers, endowments and family offices, see it differently. Ingrid Solberg, who oversees private markets for a Norwegian university endowment, said she had received 14 requests this year to roll her stakes into continuation funds and had accepted two. “Every one of these comes with a valuation set by the same firm that is buying and selling,” she said. “They bring in a fairness opinion and a lead investor, and I am sure it is all proper. But I did not invest in 2016 to still own the same company in 2030.”
The strain shows in how the industry raises money. European buyout funds closed on about 60 billion euros of new commitments in the first nine months of the year, the lowest since 2015, and fund-raising cycles have stretched from 12 months to more than 20. Firms that cannot return cash find it harder to ask for more.
Academics who study the industry say its central promise is being tested. “Private equity’s claim was always that it buys, improves and sells,” said Caterina Bassi, a professor of finance at a London business school. “Buying still works. Improving, often. Selling is the part that depended on someone else wanting what you have, and for four years that has not been true at the prices the firms need.”
Mr. Fenwick, for his part, said the market would turn, as it always had. Asked when, he said: “I have been saying 18 months for three years. I am going to keep saying it until I am right.”
A version of this article appears in print on Oct. 12, 2026, Section B, Page 4 of the European edition with the headline: Private Equity Owns Thousands of European Companies. It Is Having Trouble Selling Them..
