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John Hunt was quoted in Financier Worldwide's feature, "The exit overhang: PE's liquidity challenge," examining how an unprecedented backlog of private equity exits is influencing fund strategy, liquidity and valuations.

As sponsors navigate a challenging exit environment, John explained that flexibility remains paramount: "As a practical matter, fund sponsors will use whatever exit routes produce the greatest and fastest returns." He noted that alternative structures will continue to play an important role, adding, "Sponsor-to-sponsor transactions and continuation funds, though not as splashy as IPOs, are important, and I expect will continue to be important even with a return of a robust IPO market, because they give other groups of strategic investors access to likely undervalued investments that simply may need a longer runway to develop."

John also addressed the valuation challenges facing the industry, observing, "Asset values of private assets have always been an important issue – not just now, and not just because of the slowdown in exits. These types of assets have always been difficult to value, and the lack of arm's-length transactions that can be used as comparables has only exacerbated the problem."

On the investor side, he highlighted increased scrutiny of fund governance and economics: "Investors also appear to be focusing on certain fund offering terms. Among other things, they appear less generous in permitting GPs to continue a fund's term without limited partner advisory committee approval. They also appear to be more interested than normal in clawback terms, especially as they relate to the structure of the waterfall."