SIE practice questionhardPrivate Equity - Exit Strategies
A private equity fund’s preferred exit strategy for a portfolio company is usually:
- ADistributing shares to all major exchanges
- BHolding the company indefinitely
- CSelling the company through an initial public offering (IPO)✓ Correct answer
- DRedeeming investor units daily at NAV
Explanation
Why C — Selling the company through an initial public offering (IPO)
PE funds typically seek liquidity via IPOs or private sales. Indefinite holding is uncommon, C is not a recognized practice, and D is not possible in private equity.
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