Archive · 23 Nov 2025
Private Equity Firms Boost Dividend Loans Amid Exit Challenges
Private equity firms are borrowing more money from banks to pay themselves and their investors.
This is because they're having trouble selling their investments and making money for their investors.
They're doing this by taking out loans and using the money to pay themselves instead of waiting for better opportunities to sell their investments.
Private equity firms are increasingly using dividend loans to pay themselves and investors
Such loans hit $28.7 billion in 2025, on track to match 2021's record
Firms struggle to find buyers for investments and cash out old ones
Investors want distributions, driving firms to buy time for better exit environments
Alternative methods like continuation funds and secondary market sales are also used
- Who
- Private equity firms
- What
- Increasingly using dividend loans to pay themselves and investors
- When
- 2025, with record levels in 2021
- Where
- Global private equity market
- Why
- To meet investor demands for distributions and buy time for better exit environments
Private Equity Firms
Debt Investors
Dividend Recaps
Private Equity Firms
Firms see dividend recaps as a way to meet investor demands and buy time for better exit environments
Debt Investors
Debt investors fear the strain of additional debt and may push back on aggressive financial policies
- Record year for dividend loans
- 2021, at $28.8 billion
- Private equity firms' challenge
- Finding buyers for investments and cashing out old ones
- Alternative methods used
- Continuation funds, secondary market sales, high-interest loans