Holding period analysis
A new dimension in reporting
We deepened our analysis of investment trends by holding period, building on the foundation laid in previous reports.
Last year, we focused on the first four years of holding periods. This year, we extend our scope to include a fifth year, reaffirming our commitment to delivering comprehensive insights.
This expanded analysis is made possible by the improved response rate to our survey and the high quality of the data collected. It highlights the strength of our dataset and the industry's continued commitment to transparency and detailed reporting.
The holding period – the length of time a private equity firm retains an investment in a portfolio company before exit – sheds light on investment strategies, market dynamics, and the overall lifecycle of private equity ownership, while also offering insight into its impact on job creation and growth.
With this analysis, we aim to explore the relationship between investment duration and employment growth, providing a deeper understanding of how holding periods correlate with job creation.
This section is still in its developmental stages. As we continue to gather and analyse data, we look forward to further enhancing this section. The ongoing support of our stakeholders in providing high-quality data is invaluable, enabling us to refine our analysis and deliver deeper insights into the nuanced relationship between holding periods and job growth.
Given the highly skewed nature of the dataset (skewness = 107, kurtosis = 15,041), outlier handling was necessary to improve statistical reliability. Like in the previous edition, Windsorization has proven to be more appropriate. Traditional trimming methods (e.g., 10th-90th percentile) risked removing valid high- growth start-up cases, while weaker Windsorization (e.g., 1st-99th percentile) failed to adequately control extreme outliers. The 5th-95th Windsorization method was selected as the best balance, capping extreme values while preserving the natural variation in job creation among VC- and PE-backed companies. This approach reduced skewness to 2.3 and kurtosis to 6.4, ensuring a more stable yet representative dataset.
Average job creation by holding period 2017-2024
By portfolio company
Holding period analysis: results
Job creation in PE- and VC-backed companies is strongest early in the holding period and then steadily moderates. On average, organic job creation is strongest in year 1 at 35%, then remains positive but moderates to 21% in year 2 and to 16%, 13%, and 10% in years 3–5. This suggests that, regardless of entry stage, the largest wave of hiring typically occurs early, driven by post-investment scaling, go-to-market build-out, and operational ramp-up; while later years reflect a shift toward stabilization and more incremental expansion.
The trend of job creation differs considerably if we analyse it by stage. Younger companies present a steeper slope: venture stage companies show a 50% increase in job creation in the first holding period, and 11% in their fifth year of holding.
As opposite, portfolio companies at a buyout stage show a much flatter slope: job growth rises by 16% in the first holding year, and then it slowly decreases, reaching 7% in the fifth year.
Moreover, we analysed the differences between regions and sectors. Although regions do not differ significantly from one another, France & Benelux has a much flatter slope in year-on-year job creation compared to the others, while the Nordics and CEE regions show steeper slopes. Sector differences in job growth seem to reflect differences in the timing and durability of organic scaling. Sectors with steep early spikes (e.g., agriculture, real estate) likely reflect a quick hiring push right after the investment to build out the team, adding commercial capacity, or scaling from a small base, followed by normalization once the initial ramp is complete and growth becomes constrained by capacity, assets, or project cycles.
Sectors with more sustained growth (e.g., Biotech & Healthcare, ICT, Financial & Insurance Activities) usually have more room to scale organically, so hiring continues over several years as companies expand products, add services, and reach more customers. This results in a slower decline in growth rates over time. Also, the large Year-1 increase in ICT and Biotech & Healthcare likely reflects a greater share of smaller venture and growth stage companies and rapid post-investment hiring to build core product, commercial, and regulatory capabilities. Project- and capex-driven sectors (e.g., Energy & Environment, Chemicals & Materials) can show non-linear slopes (mid-hold bumps) because hiring often follows the timing of projects.