Audax's exit spree highlights PE's increasing secondary sales

Boston-based private equity firm Audax Management Co. LLC's sale of Stout Risius Ross LLC to Integrum Holdings LP, one of five secondary exits for Audax this year, highlights private equity's increasing interest in secondary sales when exits overall have been muted.

Chicago-based Stout specializes in corporate finance, accounting and transaction advisory, valuation, financial disputes, claims, and investigations. Audax first invested in the company in 2021. During the holding period, the middle-market firm completed 10 add-on acquisitions and grew Stout's headcount to 1,158 in May from 627 in October 2021, according to S&P Global Market Intelligence data. Instead of exiting in what appears to be a recovering IPO market, the firm opted for a secondary sale.

Audax has been one of the most active private equity sellers in 2025, with a total of eight exits, including trade sales, announced between Jan. 1 and Aug. 27. By comparison, the firm announced five divestments for full year 2024 and two in 2023, according to Market Intelligence data.

Secondary sales have been the firm's preferred method of divestment. Since January 2024, eight of the 13 exits Audax announced or completed were in the secondary market.

Recent secondary exits included the sale of registered investment adviser CW Advisors LLC to Reverence Capital Partners LP portfolio company Osaic Inc. The deal closed Aug. 12. Others included the sale of boiler service and maintenance provider Thermogenics Inc. to Morgan Stanley Private Equity, and the sale of waste treatment company Liquid Environmental Solutions Corp. to Goldman Sachs Asset Management LP.

Liquidity needs drive secondaries

Private equity sponsor-to-sponsor exits globally climbed 12.6% year over year in 2024 to $162.4 billion, according to Preqin Pro data. Deal value of private equity secondary exits in 2025 totaled $40.14 billion through April 30.

The secondary market is seeing more activity because it provides a critical liquidity solution for private equity firms at a time when IPO and M&A routes remain uneven, said Alex Chauvin, a secondaries specialist in the global private equity practice of law firm White & Case LLP.

"Despite equity markets trending upwards, IPO windows remain selective and execution risk is high, especially given some of the volatility we have experienced in recent years," Chauvin said, adding that secondary exits can often be executed more quickly and with a higher degree of control and timing than a corporate sale.

KKR & Co. Inc. expects sponsor-to-sponsor activity to pick up in 2025 as firms look to give capital back to their limited partners amid an uncertain environment, co-CEO Scott Nuttall said during the firm's fourth-quarter 2024 earnings call.

Chauvin also believes secondary deals will remain high into 2026. "The secondary market has firmly established itself as a key exit route for private equity firms, and until we see a prolonged and successful return to M&A and IPO dealmaking, we expect that to remain the case," Chauvin said.