How Private Market Cycles Work — From Vintage Year to Exit

Private markets operate on a rhythm very different from listed markets. Instead of daily price movements, they follow multi-year vintage cycles — each shaped by valuations, liquidity, macro conditions, and exit environments.

A strong vintage year often follows a correction. Lower valuations allow funds to buy companies at attractive entry points, improving long-term IRRs. Mid-cycle vintages rely on strong economic growth, while late-cycle vintages carry higher risks as valuations peak and exits slow.

Understanding these cycles helps investors align expectations, especially in AIFs where capital is locked for 5–7 years. Vintage discipline also explains why two funds from the same manager can deliver very different outcomes depending on the year capital was deployed.

Exits — through IPOs, secondary sales, buybacks, or strategic acquisitions — typically occur years after deployment. Investors who understand this cycle enjoy clarity and stay invested with confidence.

Truvest Insight:

Choosing when you commit capital can be as powerful as choosing who manages it.

Disclaimer:

Educational only. Not investment advice.