Every reopening of the exit market begins with a handful of marquee deals that let everyone declare the window open. A couple of big listings price well, a few large sales close, and the narrative shifts from frozen to thawing. The harder question is whether the window is open for everyone, or only for the trophy assets at the front of the queue.
The backlog is enormous. Years of frozen exits left portfolios stuffed with companies that should have been sold by now, and the pressure to return capital to limited partners is acute. A reopening that only clears the best assets does little for the long tail of decent-but-not-spectacular businesses that make up most of the backlog.
The two-tier market
What is emerging looks like a two-tier exit market. Trophy assets with clean growth stories find buyers at full prices. Everything else faces a tougher sale, wider bid-ask spreads, and buyers who remember that the seller is motivated. The continuation fund has become the pressure valve for assets that cannot find a clean exit, but it is not a substitute for a real sale.
For the reopening to be real rather than rhetorical, the second tier has to clear. That requires either better operating performance that makes the assets genuinely more saleable, or sellers willing to accept prices that reflect the market as it is rather than the market they hoped for.
A few good headlines do not make a market. The exit window is open a crack. Whether it opens fully depends on whether the unglamorous middle of the backlog can find its buyers, and that test has only just begun.