What is a hold period?
The hold period is how long a private equity firm owns a company before selling it, commonly about four to seven years. Holds stretch when exit markets slow. Using Preqin data, S&P Global Market Intelligence reported in November 2023 that the average holding period for US and Canada buyout funds had reached 7.1 years for 2023 to date, up from 5.7 years in 2022.
Why it matters to a revenue leader
The hold period is a revenue leader's real planning horizon. Changes that take two years to pay off, such as new territories, a rebuilt manager bench or a shift toward service agreements, must start early enough to show in the numbers before the sale. Late in the hold, buyers want proof that growth repeats, so a steady trend counts for more than one strong quarter.
Example
Fictitious numbersA sponsor plans a five-year hold for a utility locating company. The CRO's plan to move 30 percent of revenue onto multi-year agreements takes three years to mature, which leaves two years of renewal history to show buyers at exit.
"How many years are left in our hold, and which of my changes will show results before the sale?"