Private-equity partnerships can cash out of companies in the partnership's portfolio in the following ways:

Question

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Private-equity partnerships can cash out of companies in the partnership's portfolio either through an IPO of portfolio companies or a trade sale to another firm. However, both options come with their own advantages and disadvantages. An IPO provides a liquidity event that can return cash to the fund and its investors. On the other hand, a trade sale may be a quicker option for realizing gains, but may not provide as high of a return as an IPO. Thus, the best choice would be a combination of both options, allowing the partnership to have flexibility and maximize their returns. A carve-out of portfolio companies is not a common method of cashing out and, therefore, is not the best choice.

Private-Equity Partnerships Can Cash Out of Companies in the Partnership's