2020–21 PE vintage under strain
Europe’s record 2020–2021 buyout vintage is showing cracks: a big chunk of deals remain unrealized, borrowers are ceding control to lenders, and realistic exit paths are narrow — a post-mortem called the period a ‘bad vintage’ with widening valuation gaps and stretched IRR math argued. That mismatch is driving more continuation funds, earnouts and creative deal terms as sponsors and LPs try to bridge expectations reported.
Bain estimated $3.6 trillion of unrealized NAV sitting in roughly 29,000 buyout-backed companies, creating a global exit overhang that peaked in Bain’s 2025 Global Private Equity Report bain.com. A Goldman Sachs analysis highlighted that direct lenders have taken control of about 146 European LBO targets since 2017, and more than 100 such debt-for-equity handovers occurred after 2021 as stressed capital structures triggered enforcement actions pitchbook.com. GP-led secondary activity has swollen: PitchBook put GP-led deal value at roughly $106 billion in 2025, while Evercore and Lazard data show continuation-style transactions (single-asset continuation funds and other GP-leds) accounted for a record share of the secondary market in 2024–25. pitchbook.com Dealmakers increasingly use contingent pay and deferred-price mechanics to bridge buyer-seller gaps—S&P Global tallied about $51.3 billion of exits with earnout components through Oct. 31, 2025—and Investec’s PE Trends 2025 survey found 46% of UK/European GPs expect to lean on continuation structures over the next two years. spglobal.com
