Private-equity partnerships can cash out in the following ways:
I. by an IPO of portfolio companies.
II. a trade sale to another firm.
III. limited partner financing.

Question

Quizplus · Accepted Answer

Private-equity partnerships can cash out their investments by either taking the portfolio companies public through an IPO (I) or by selling them to another firm in a trade sale (II). Limited partner financing (III) is not a method of cashing out for the private-equity partnership, but rather a form of financing for the limited partners. Therefore, the correct answer is C, as only options I and II are valid methods of cashing out for the private-equity partnership.

Private-Equity Partnerships Can Cash Out in the Following Ways