When a private equity firm buys a business, the clock starts ticking--and the countdown begins toward the ultimate exit from the investment, through a sale or initial public offering.

The average five-year holding period for portfolio companies may give the sponsor and the company's management a finite time frame within which they act to expand the business--and, hence, helping align expectations on the exit point---but it isn't necessarily the best way to achieve high returns, according to speakers on a webcast hosted Wednesday by trade publication The Deal titled "Private Equity Exit Strategies."