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Antoine Munoz, Deputy Global Head of Private Equity at Apollo, warned CNBC at the SuperReturn International conference in Berlin that private equity investors need to prepare for more pronounced divergence in returns. Currently, the industry faces issues of multi-year delays in exits and aggressive valuations, with a backlog of $4 trillion in unsold assets. Munoz pointed out that the average holding period for private equity assets has doubled from the historical norm of about four years to nearly eight years, resulting in a large number of assets pending sale and increasing pressure on sponsors to return capital to investors. He anticipates that as the industry digests these backlogged assets, asset distributions will increase, but this may not necessarily be a positive outcome for general partners.
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