Private Markets Alert Newsletter

✍️ Op-Ed: The Zombie Apocalypse Has Arrived

Private equity's chickens are coming home to roost. After gorging on cheap debt in 2020-2021, PE firms now face a harsh reality: $1 trillion in unsold assets trapped on balance sheets, with average holding periods hitting a record 5.6 years. The investment-to-exit ratio has climbed to 3.14x—the highest in a decade—meaning firms are buying three companies for every one they sell.

The "zombie company" phenomenon isn't just a colorful metaphor anymore. These are real businesses that can't grow, can't service their debt, and can't attract buyers even at steep discounts. Nearly half of institutional investors report exposure to funds unlikely to ever exit their investments. The machine, as one HEC Paris professor bluntly stated, is stuck.

What makes this crisis particularly insidious is the incentive structure keeping these corpses propped up at the board table. Liquidating means crystallizing losses and damaging fundraising prospects. So GPs kick the can, hoping for a miraculous turnaround or better exit markets that may never materialize. Meanwhile, LPs watch their capital languish, unable to commit to new opportunities.

But there's a potential lifeline emerging: the "retailization" of private equity. Mass-affluent investors willing to accept 10-12% returns instead of the traditional 25% could provide the lower-cost capital needed to absorb assets that no longer fit institutional models. Combine this with the continued expansion of continuation funds, NAV facilities, and secondaries markets, and we may see the logjam begin to break.

The question is whether this happens fast enough—or whether we're in for a prolonged period of capital imprisonment reminiscent of the post-2008 crisis. For an industry built on liquidity and quick exits, that's a terrifying prospect.

🤝 Top Deals

• Charles Schwab acquires Forge Global for $660 million to democratize private markets access across 46 million client accounts and $11.6 trillion in assets, with platform having facilitated $17 billion in private share transactions since 2014. Read more →

• Electronic Arts $55 billion leveraged buyout closes as largest LBO of all time as of September 29, 2025, marking watershed moment for private equity scale and ambition. Read more →

• Clearlake Capital takes Dun & Bradstreet private in $5.5 billion transaction, representing one of Q3's mega-deals driving quarterly deal activity despite volume concerns. Read more →

• Thoma Bravo acquires Boeing assets in $4 billion unitranche financing, showcasing private credit's ability to support complex corporate carve-outs and strategic divestitures. Read more →

• BioCryst Pharmaceuticals secures $550 million direct lending facility from private credit market to finance acquisition of Astria Therapeutics, demonstrating public company embrace of alternative financing. Read more →

• Accel-KKR raises $1.9 billion for second iSolved continuation vehicle, marking emerging trend of sponsors executing multiple continuation funds for same portfolio company to extend hold periods. Read more →

• LSEG partners with Nasdaq to distribute private markets data, integrating eVestment datasets through Workspace and Datafeeds platforms following September UK Private Securities Market launch. Read more →

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