We believe the pervasive views tend to be greatly exaggerated, though the underlying shifts inspiring them are worth examining. Deal volume increased by approximately 78% from 2024 to 2025. However, the deal count decreased by about 13% over the same year.1 A handful of outsized transactions skewed the averages, but the real story is that demand for high-quality assets remains strong. The exit window hasn’t closed; it is more selective about who gets through it.
Timing isn’t Everything
But disciplined exit timing across market cycles is
Today’s exit environment is a direct consequence of yesterday’s decisions. Some managers chased an overheated market too aggressively; others piled into a single sector or investment theme and stayed there too long. Those choices are now shaping how portfolios are positioned, and in many cases, how managers are navigating exits in a more selective exit environment.
Many of today’s concerns around exits are rooted in the industry’s over-deployment in 2021 and 2022, when prices were high and interest rates were low. That market environment is gone. Cheap leverage and multiple expansion no longer do the heavy lifting; rapid technological evolution and geopolitical uncertainty have only raised the degree of difficulty. Today, value creation is the most critical driver of return. It is estimated that it now takes roughly 12% earnings growth to produce 2.5x your money in five years, versus the roughly 5% growth that would have sufficed a decade ago.1 That gap is the clearest measure of how much of the industry’s past returns came from multiple expansion and leverage rather than genuine operating improvement. For managers without a proven value creation playbook, exits are far harder today. The result: a growing backlog of companies that need to be sold into a market where multiples have compressed, and leverage is more expensive and less readily available.
As we noted in a recent article, approximately 32,000 companies worth nearly $4 trillion sit unsold in private equity portfolios globally as of year-end 2025. Average hold periods have stretched from five-to-six-year historical averages to roughly seven years today.1 The exit backlog is real, and it won’t clear itself. But not every manager is stuck in it.
At KKR, our average hold period for traditional private equity funds remains about five years. We believe that reflects, in part, the discipline of maintaining a consistent pace of deployment. Rather than chasing cyclical themes—leaning into hot markets and then sitting on the sidelines when they cool—we aim to deploy roughly the same amount of capital across roughly the same number of deals each year, regardless of what the market is doing. A steady, linear pace of deployment on the way in seeks to avoid overpaying at the top of a cycle or piling into sectors that later fall out of favor, both of which are common contributors to the backlog other managers now face.
EXHIBIT 1: KKR 6-Year Annual Average Deployment
