Key Takeaways
- • Bain estimates more than 32,000 unsold private equity companies worth $3.8 trillion are trapped in portfolios, according to the Bloomberg report.
- • The median life of a private equity fund has risen to 15 years, per Todd Miller of Jefferies Financial Group, versus the traditional 10-year model.
- • Kroll data since 2005 show value creation by vintage stagnates after eight years and declines as holding periods extend, per Mitchell Mansfield.
- • Blackstone's perpetual funds reached roughly $556 billion as of June 30, nearly 48% of fee-earning assets under management.
- • Investor payouts as a share of total net private equity portfolio value are at a near 16-year low, and 20% of limited partners are reducing buyout allocations, according to Bain.
Summary
Private equity firms are holding assets far longer than the traditional 10-year fund model, according to a Bloomberg report. Hellman & Friedman still owns Kronos, now known as UKG, nearly 19 years after its 2007 take-private with JMI Equity, and there are no imminent plans for a sale or IPO. Across the industry, buyout firms are parking prized and hard-to-sell assets in continuation funds, with insurers, or on their own balance sheets. Todd Miller, global co-head of secondary advisory at Jefferies, says the median fund life has risen to 15 years.
The shift followed the 2022 rate increases, which raised borrowing costs, reduced valuations and largely froze the exit market. Bain puts the backlog at more than 32,000 unsold companies worth $3.8 trillion. Kroll's analysis of global private markets since 2005 found returns, measured as multiples of invested capital, stagnate after eight years and decline as holding periods extend. Mitchell Mansfield of Kroll said, "After eight years, nothing good happens."
The structural incentives are significant. Fee income is charged on total assets, so holding assets generates fees with fewer costs, reducing pressure to exit. Blackstone's perpetual funds reached roughly $556 billion as of June 30, close to 48% of its fee-earning AUM, and Brookfield, KKR's Strategic Holdings unit, Carlyle and TPG have also built long-hold vehicles. Limited partners are frustrated: the Teacher Retirement System of Texas has twice adjusted its private equity planning assumptions, and Bain reports 20% of LPs are reducing buyout allocations. Investor payouts as a share of total net portfolio value are at a near 16-year low.
Managers argue continuation vehicles are needed for long-duration assets such as data centers, power infrastructure and energy-transition projects. Continuation deals now account for almost 14% of exits, per Jefferies. Disputes have emerged, including between Abu Dhabi Investment Council and Energy & Minerals Group, and Platinum Equity's 2021 single-asset vehicle for United Site Services has unraveled, with Fortress, Ares and Blackstone among managers set to lose a combined $1.4 billion. Structured solutions such as collateralized fund obligations, used by Carlyle AlpInvest, Ares and others, are growing, and Evercore now expects CFO volume to double its earlier $30 billion forecast. Dividend recapitalizations also spiked, accounting for about $75 billion in 2025 according to Citizens Bank.
The shift followed the 2022 rate increases, which raised borrowing costs, reduced valuations and largely froze the exit market. Bain puts the backlog at more than 32,000 unsold companies worth $3.8 trillion. Kroll's analysis of global private markets since 2005 found returns, measured as multiples of invested capital, stagnate after eight years and decline as holding periods extend. Mitchell Mansfield of Kroll said, "After eight years, nothing good happens."
The structural incentives are significant. Fee income is charged on total assets, so holding assets generates fees with fewer costs, reducing pressure to exit. Blackstone's perpetual funds reached roughly $556 billion as of June 30, close to 48% of its fee-earning AUM, and Brookfield, KKR's Strategic Holdings unit, Carlyle and TPG have also built long-hold vehicles. Limited partners are frustrated: the Teacher Retirement System of Texas has twice adjusted its private equity planning assumptions, and Bain reports 20% of LPs are reducing buyout allocations. Investor payouts as a share of total net portfolio value are at a near 16-year low.
Managers argue continuation vehicles are needed for long-duration assets such as data centers, power infrastructure and energy-transition projects. Continuation deals now account for almost 14% of exits, per Jefferies. Disputes have emerged, including between Abu Dhabi Investment Council and Energy & Minerals Group, and Platinum Equity's 2021 single-asset vehicle for United Site Services has unraveled, with Fortress, Ares and Blackstone among managers set to lose a combined $1.4 billion. Structured solutions such as collateralized fund obligations, used by Carlyle AlpInvest, Ares and others, are growing, and Evercore now expects CFO volume to double its earlier $30 billion forecast. Dividend recapitalizations also spiked, accounting for about $75 billion in 2025 according to Citizens Bank.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.