‼️ Private equity firms, which amassed nearly $4 trillion in assets during the low-rate era, are struggling to sell portfolio companies as higher borrowing costs depress valuations and dealmaking. With $3.8 trillion of unsold assets and average holding periods stretching to seven years, the exit backlog has become a structural industry problem, dragging down cash distributions to investors. In response, firms are turning to “structured equity”—hybrid debt-and-equity deals that can boost reported fund performance and provide liquidity while allowing managers to retain companies they cannot yet sell at attractive prices, though some institutional investors worry this prioritizes upfront cash over long-term returns.
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