In line with a global trend, Brazil’s private equity industry has faced, in recent years, a bottleneck in exit opportunities — the sale of a company to obtain a return on investment. The effect can be felt in the average period that managers are taking to find business sales opportunities, which reached six years and three months between 2023 and 2025.
Between 2018 and 2022, a supercycle period for private equity investments, the average reached five years and three months in Brazil. “The absolute number of exits is not that low. In the last three years, the number is similar to that cycle. What worries the industry is, in fact, the percentage of inventory”, explains Bain partner and leader of the Private Equity practice for South America, Gustavo Camargo.
It turns out that while there was stability in the exit rate, they continued to add companies to their portfolios, increasing the stock. To give you an idea, the number of exits as a percentage of the sector’s portfolio has fallen repeatedly since 2023, when it was at 9%. In 2024, divestments already represented 7% of the total number of companies within the management companies and, in 2025, it increased to 4%.
The main cause behind the scenario formed in recent years is the difficulty in finding liquidity events. “Today we have a stock of 250 companies in the portfolio of private equity funds. More or less half of them were investments made more than four years ago and 30% were made more than six years ago. This 30% should be going to the market”, points out Camargo.
The increase in investor selectivity has directly impacted the maturity of funds for years. While in 2020 the number of companies with more than six years in the funds’ portfolio was 24%, in 2025 it reached 29%. At the other end, the number of companies with less than two years old fell from 35% to 22% in the period.
“The first challenge is the following: the longer it takes to complete the business, the lower the return rate”, explains Camargo. “It is necessary to increase the value of the company further to be able to compensate for the investor. The challenge is to have plans to generate value and be able to show the buyer that the company is worth more.”
Continues after advertising
Another bottleneck has to do with fundraising. With the increase in the exit period and the drop in profitability, the returns received by pension funds, sovereign wealth funds, families and other investors committed to the managers decreased, making it difficult to commit to new investments.
Global data shows that the phenomenon is not restricted to Brazil. From 2023 to 2025, the percentage of companies with more than five years in the portfolio of private equity managers increased from 33% to 39%, while the number of companies with less than two years decreased from 46% to 35%.
The expectation, shows the global report, is that the exceptionally high volume of investments in 2021 and 2022 will continue to put upward pressure on average investment periods. The high amounts paid by companies in that period, says Bain & Company, also required higher levels of growth in operating results, made difficult by a succession of unpredictable events, such as a pandemic, rising interest rates and concerns about tariffs.
