Exit Strategy Evolution: IPOs vs. Strategics in 2025

NIQ is going public. Jefferson Capital just raised $150 million in its Nasdaq IPO. Hg-backed Visma is targeting a €19 billion listing in London.

After years of IPO drought, the public markets are showing signs of life. But before you dust off your S-1 templates, consider this: the exit landscape has fundamentally changed.

Strategic sales are still happening. Continuation funds are extending hold periods. Secondary sales are providing partial liquidity. And some firms are choosing to stay private indefinitely.

The old binary choice between IPO and strategic sale? That’s over. Welcome to the era of portfolio exit strategies.

1. The IPO Drought is Over (Maybe)

Let’s start with what’s actually happening in the IPO market.

2024 IPO activity:

• US IPO volume up 30% from 2023 (though still 60% below 2021 peaks)
• European IPO activity showing signs of recovery
• PE-backed IPOs representing 40% of total volume
• Average IPO size increasing as only high-quality companies go public

Recent PE-backed IPOs:

• Jefferson Capital: $150 million raise, J.C. Flowers retaining 68.9% control
• NIQ: Advent and KKR-backed consumer insights company
• Visma: Hg targeting €19 billion listing in London

But here’s what the headlines miss: these aren’t traditional IPOs. They’re strategic liquidity events that allow PE firms to monetize part of their investment while maintaining control and upside participation.

Jefferson Capital is the perfect example. J.C. Flowers is using the IPO to provide liquidity to LPs while retaining operational control. It’s not an exit—it’s a financing strategy.

2. When Strategic Sales Still Make Sense

Despite the IPO recovery, strategic sales remain the dominant exit strategy for most PE deals. And for good reason.

Strategic sales advantages:

• Certainty: Negotiated price and terms vs. market volatility
• Speed: 6-12 month process vs. 18+ months for IPO
• Synergies: Strategic buyers can pay premiums for operational synergies
• Simplicity: Single transaction vs. ongoing public company obligations

Recent strategic sale examples:

• EQT’s Pioneer Corporation exit: $1.1 billion sale to CarUX after five-year transformation
• Partners Group’s Aavas Financiers exit: Sale to CVC after successful value creation
• Brookfield’s Mare Nostrum Resort exit: €430 million sale to Spring Hotels

The pattern across successful strategic sales is clear: they work best when the PE firm has created value that strategic buyers can’t replicate internally.

Strategic sales work when:

• The portfolio company has unique capabilities or market position
• Strategic buyers can achieve operational or revenue synergies
• The business model benefits from integration with larger platforms
• Market timing favors negotiated transactions over public market volatility

3. The Hg-Visma €19bn Test Case

Hg’s planned €19 billion IPO of Visma is the most important exit to watch in 2025. Not because of the size, but because of what it represents.

Why Visma matters:

• Scale: €19 billion valuation would make it one of Europe’s largest tech IPOs
• Market test: London Stock Exchange desperately needs successful large IPOs
• PE validation: Hg has owned Visma since 2006, demonstrating long-term value creation
• Strategic timing: IPO market recovery coinciding with strong business performance

The Visma value creation story:

• Geographic expansion: From Nordic focus to pan-European platform
• Product integration: Combining accounting, payroll, and business software
• Acquisition strategy: 100+ acquisitions integrated into unified platform
• Market leadership: Dominant position in European SME software market

If Visma’s IPO succeeds, it validates the thesis that high-quality, profitable tech companies can access public markets at attractive valuations. If it fails, it reinforces the view that public markets aren’t ready for large PE exits.

4. Why London is Fighting for Listings

The Visma IPO is part of a broader battle for European listings, with London trying to reverse a trend of companies choosing New York over London for public offerings.

London’s challenges:

• Valuation discount: UK tech companies trading at 20-30% discount to US peers
• Liquidity concerns: Lower trading volumes compared to US markets
• Regulatory complexity: Brexit-related complications for European investors
• Currency risk: Sterling volatility affecting international investor appetite

London’s advantages:

• Time zone: Better for European investors and management teams
• Regulatory familiarity: Established relationships with UK regulators
• Cost efficiency: Lower listing and ongoing compliance costs
• Market knowledge: Local investors who understand European business models

The success or failure of large IPOs like Visma will determine whether London can compete with New York for European growth company listings.

5. Your Exit Strategy Playbook for 2025

So how do you think about exit strategy in this complex environment?

Start with optionality, not certainty. The best exit strategies preserve multiple options rather than committing to a single path early in the hold period.

Build for public company readiness. Even if you plan a strategic sale, building public company-ready financial reporting and governance creates optionality and can increase strategic sale valuations.

Understand your buyer universe. Map out both strategic and financial buyers early in the hold period. Market dynamics can change quickly, and you want to be ready for multiple scenarios.

Consider partial liquidity strategies. Continuation funds, secondary sales, and dividend recaps can provide LP liquidity while preserving upside participation.

Time the market, but don’t depend on it. Market timing matters, but the best exits are driven by business performance, not just market conditions.

Prepare for longer processes. Whether IPO or strategic sale, exit processes are taking longer and requiring more preparation than in previous cycles.

Think about post-exit value creation. Some of the best returns come from continued value creation after the initial exit, whether through retained stakes in public companies or earnout provisions in strategic sales.

The Bottom Line

The exit landscape in 2025 is more complex and more opportunity-rich than ever before. The firms that succeed will be those that build optionality into their exit strategies and remain flexible as market conditions evolve.

IPOs are back, but they’re different. Strategic sales remain dominant, but buyers are more selective. Continuation funds are extending hold periods, but only for assets with clear value creation opportunities.

The key is to build businesses that can succeed in any exit scenario, rather than betting on a single exit strategy.

Because in today’s market, the best exit strategy is the one you don’t have to use.

How are you thinking about exit strategy in the current environment? What changes are you seeing in buyer behavior and market dynamics? Share your insights with the VCII community.