Improving economic conditions in North America saw 2013 fuel the highest level of volume and values by entry enterprise value (EV) for private equity (PE) exits since 2006, according to EY's annual North American PE study.

A study of North American exits highlights that IPOs drove exit activity in 2013. Increased public market demand and a return of corporate buyers meant that IPOs accounted for 61% of aggregate PE entry value of exits. The report, now in its eighth year, examines the results and methods of 893 exits between 2006 and 2013.

As the IPO market reached record levels in 2013, PE was well positioned to exit some of the largest companies acquired prior to the financial crisis. In 2013, the percentage of PE exits via IPO with an entry EV of USD 1 billion was 30%, and 25% of deals with an entry EV of USD 1 billion+ were acquired by M&A buyers, a significant increase from 14% in 2011. With 169 exits at USD 203 billion by entry EV last year, North American PE is making significant progress in exiting its portfolio and has the best trajectory since the crisis.

Jeffrey Bunder, EY's Global Private Equity Leader, said, "The improvement in overall market conditions is having a very positive effect on the prospects of portfolio companies particularly those most affected by the recession. The acceleration of PE exits is putting a dent in years of increased holding periods and the perception of stuck assets. PE is clearly taking advantage of a robust IPO market and an increased demand for M&A among strategic buyers to exit portfolio companies, continuing to provide liquidity to limited partners, to address the impact of longer hold periods."