A bad vintage – what is happening with the 2020/2021 PE-backed buyout class in Europe?

As 2026 kicks off, many GPs are beginning to assess exits for assets they purchased at peak valuation and with cheap debt in the 2020/2021 period. Sponsor entrances for that period were just shy of EUR 300bn, representing the busiest year ever for M&A.

Rachel Lewis, Mergermarket’s co-head of news in Europe, has compiled a data report looking at the situation with this vintage class now that typical hold periods are coming to an end. Lewis joins Dealcast host Julie-Anna Needham to discuss how sponsors are attempting to realize liquidity, with around two-thirds of assets from that time still unrealized.

This episode explores why conditions were so good in 2020/2021 and why the market hasn’t recovered from a subsequent dip in 2022. It looks into which sectors are doing well, like industrials and chemicals, and why investors are more “risk off” when it comes to software assets. They also discuss how successful exits have taken shape and the methods investors are using, including specialty deal terms, to bridge the valuation gap.

This Dealcast answers questions such as: Why aren’t dual track processes as popular as they were expected to be at the start of year? Which particular deals stand out? How are geopolitics are impacting market conditions? And can LPs forgive a bad vintage?