Global instability, combined with a ~$3.8 trillion backlog of unsold private equity assets, is reshaping the market for future business sales.
The core issue is structural: roughly 11,000 private equity–backed companies have been held for more than five years. At the same time, distributions to limited partners have declined, contributing to a 16% drop in fundraising. The result is a feedback loop—less capital available to buy businesses, increased pressure to sell, and a growing pipeline of companies coming to market.
Geopolitics adds another layer. The Strait of Hormuz is critical to energy prices, inflation, interest rates, and supply chains. If tensions ease, oil volatility should decline, lending conditions may stabilize, and debt markets could reopen more predictably. That would support M&A activity—but it won’t solve the underlying oversupply of businesses for sale.
As Serena Tan has observed, many firms are already preparing by streamlining operations and improving performance to get assets exit-ready.
What this means for sellers:
- Competition among sellers is increasing
- Buyers will be more selective
- Well-prepared, high-performing companies will stand out
- Early movers will get better pricing
- More structured deals (earnouts, seller financing) less 100% cash deals
Our recommendation:
If you’re considering a sale, focus on tightening operations, improving profitability, and documenting systems and processes now—and be prepared to move early when the market window opens, before supply peaks.