Growth Equity Fills IPO Void as Structural Challenges Persist | Podcast Digest
- Editor
- Feb 1
- 2 min read
In Brief
In a conversation with FTV Capital's Managing Partner Brad Bernstein shares how growth equity is reshaping capital markets, with his firm's remarkable success – raising $4 billion in new funds, deploying $1.6 billion in investments, and securing $1 billion in exits – exemplifying broader industry shifts away from traditional public markets.
Why It Matters
The traditional IPO pathway is fundamentally broken for all but the largest companies, creating an unprecedented opportunity for growth equity firms to bridge the capital gap while providing strategic value beyond just funding.
Big Picture Drivers
Market Evolution: ETF dominance has eroded the active investor base crucial for IPO support
Cost Barriers: Public company compliance overhead now exceeds $7.5M annually
Scale Requirements: IPO viability threshold has risen from $75M to $50B+ in revenue
Private Solutions: Growth equity ecosystem now offers comprehensive funding alternatives
Value Creation: Successful firms combine capital with deep operational expertise
By The Numbers
Private Capital: $1.6 trillion in pre-2019 private equity NAV requires exits
IPO Decline: Public offerings at lowest level since 2008 financial crisis
Growth Range: Typical portfolio companies growing 20-50% annually
Market Size: Financial services represents largest vertical market for enterprise tech
Deal Flow: 3 million companies tracked globally by leading growth equity firms
Key Trends to Watch
A massive wave of private equity holdings requires liquidity events within 36 months
European growth companies increasingly seek U.S. market access through experienced partners
Capital-efficient businesses with recurring revenue streams attract premium valuations
Growth equity firms expand capabilities to serve $20-300M investment range as companies stay private longer
The Wrap
As structural challenges persist in the IPO market and private equity faces a massive liquidity event horizon, growth equity firms are emerging as critical intermediaries, providing both capital solutions and operational expertise for growing companies seeking alternatives to public markets.
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