Show Me the Exits: The Real Way to Evaluate Private Equity Performance

Private equity performance should be judged by disciplined value creation and cash returned at exit, not by headline averages or unrealized valuations.

• Global private-equity deal volume rose approximately 78% from 2024 to 2025, while deal count fell about 13%, showing that a small number of large transactions distorted industry averages.
• The industry deployed heavily in 2021 and 2022, when prices were high and rates were low; roughly 12% annual earnings growth is now needed to achieve a 2.5x return in five years, versus about 5% a decade ago.
• Around 32,000 companies worth nearly $4 trillion remained unsold in global private-equity portfolios at year-end 2025, and average holding periods had lengthened from five-to-six years historically to roughly seven years.
• KKR says its traditional private-equity funds have maintained an average holding period of about five years by deploying a broadly consistent amount of capital across a similar number of deals each year.
• KKR plans potential buyers before signing an acquisition, has achieved an approximately even split among strategic, sponsor and public-market exits over the past decade, and generally pursues a sale after completing about 80% of its value-creation plan.

Takeaway: Investors should assess private-equity managers through deployment discipline, operational improvement, exit optionality and cash distributions; the liquidity backlog is real, but managers with repeatable value-creation and monetization processes are better positioned to navigate it.