EC launches consultation on private equity exits

The European Commission (EC) has launched a consultation seeking feedback on obstacles faced by private equity investors when exiting investments in EU private companies and on potential ways to address these obstacles. The consultation forms part of the EC's work under the Savings and Investments Union and aims to improve access to finance for EU start‑ups and scale‑ups. The EC notes that persistent challenges, such as not being able to wait for an initial public offering (IPO) to realise capital gains or the lack of a credible valuation of private assets may hinder a transaction. These difficulties reduce market activity, limiting the availability of growth capital and possibly prompting companies to move outside the EU in search of funding. Therefore, the EC is seeking views on the: (i) possible barriers or issues for exiting private equity investments in the EU; (ii) the merits and possible design features of a platform for secondary trading of private company shares; and (iii) the potential of an extended use of such a platform for raising new equity capital. The deadline for responses is 27 April, and the feedback will inform the EC's decision on whether further regulatory or policy action is warranted in this area.

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