Dividend recapitalization — the portfolio company raises incremental debt and distributes the proceeds to its equity sponsor as a special dividend. Returns capital to LPs without selling the business, accelerating IRR (cash returned earlier) even though MOIC is unchanged at exit. Requires sufficient debt capacity (leverage headroom above current levels) and a receptive credit market. The downside is increased financial risk on the surviving capital structure — leverage and interest expense rise, reducing the cushion against operational underperformance.