PE Firms Are Holding Investments Longer—and Changing Leaders More

A facts-only brief, written by a local AI model from this article in The Wall Street Journal, October 22, 2026. It may contain mistakes, and it is not the article: the full story is at wsj.com.

Private-equity firms are extending their holding periods beyond the traditional three- to five-year window, a shift that is prompting frequent CEO replacements as original investment theses become obsolete. According to a report from Summit Leadership, 72% of the 176 private-equity executives surveyed indicated they had installed a new CEO in more than a quarter of their portfolio companies. This trend is driven by changing macroeconomic conditions and the disruptive potential of artificial intelligence, which forces firms to re-evaluate their strategic roadmaps. Consequently, leadership teams are prioritizing urgent operational challenges, such as managing inflation and AI threats, over long-term growth goals to ensure immediate stability.

Background

• PitchBook data shows that nearly 24% of the 33,853 private-equity-backed companies globally had been held for at least seven years as of the end of September.
• Russell Reynolds Associates notes that portfolio companies average two CFOs per deal, resulting in a typical CFO tenure of 2.5 years, which is double the turnover rate seen in public companies.
• Summit Leadership’s founder, Dan Hawkins, stated that the evolving needs of portfolio companies have increased the focus on CEO selection.
• To mitigate the disruption caused by CEO changes, private-equity sponsors are using equity incentives to retain other key employees they deem critical to the company’s success.

Read the full article at wsj.com

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