Private equity performance in 2025 was lackluster, with buyout funds struggling due to an abundance of unsellable companies. Fundraising has declined each year since 2023, posing challenges for institutional investors. High interest rates and overvalued companies hinder exits, limiting cash returns. 2026 may see slight improvement, but the industry faces significant obstacles.

Dr. Eileen Appelbaum highlights private equity struggles, attributing poor performance to overvalued assets and high interest rates. Unsold companies and limited cash returns deter institutional investors, impacting fundraising. The industry’s future remains uncertain, with challenges persisting despite potential improvements in 2026.

Private equity’s inability to sell overvalued companies and limited cash returns pose significant challenges for the industry. Institutional investors are cautious due to declining fundraising and the prevalence of ‘zombie funds’. Dr. Appelbaum emphasizes the need for transparency and liquidity in alternative investments to protect workers’ retirement savings.

Read more at Yahoo Finance: Private Equity Has Fallen Out of Favor with Some Institutional Investors