Private equity firms are sitting on a huge pile of aging investments, with 33% of U.S. buyout deals from 2017 yet to be sold nearly a decade later.
The backlog is becoming harder to ignore as another wave of investments approaches the point when sponsors would typically look to cash out, according to a new PitchBook report.
The problem is not simply that private equity firms are holding companies longer. Higher financing costs and uncertainty around future earnings have made it harder for potential buyers to justify the valuations sellers are seeking.
"Higher borrowing costs increased the cost of acquisition financing for both strategic and sponsor buyers," PitchBook said, adding that this has "further widen[ed] the gap between seller expectations and buyer willingness to pay."
Tariff uncertainty has compounded the problem by making future earnings harder to forecast, according to the report.
The result is an industry still working through the backlog created by the post-COVID-19 pandemic deal boom. The number of U.S. private equity-backed companies reached 13,325 in the first quarter, up from about 12,900 in the third quarter of 2025.
At the annualized pace of exits recorded in the first quarter, PitchBook estimates it would take more than 10.8 years to clear the inventory. Nearly 27% of those companies were already at least seven years old as of May 30.
The 2021 Vintage Is Another Problem
The backlog could become even more difficult as the record-setting 2021 vintage ages. Only 18% of the 2021 cohort had been monetized four years after investment, compared with 31.9% of the 2017 cohort at the same point.
If exits remain at the current pace, PitchBook estimates less than half of the 2021 cohort would be wound down over a 10-year investment cycle.
PitchBook acknowledged the calculation is a simplified extrapolation, but said the takeaway is straightforward: "To clear the inventory accumulated during the peak dealmaking years, exit activity will need to accelerate meaningfully."
Fundraising Is Concentrating
The exit crunch is occurring alongside a fundraising market increasingly dominated by the industry’s largest managers.
The 10 largest U.S. private equity funds accounted for 48.2% of capital raised through the first five months of 2026, up from 40.3% for all of 2025 and the highest share in the past decade.
PitchBook said, "The largest funds are taking an even larger share of a shrinking fundraising pie."
Only 18 first-time funds had closed through May, compared with 24 in the first half of 2025, while experienced managers captured 87.3% of capital raised.
AI uncertainty is adding another complication. Information technology accounted for just 12.7% of platform LBO value through May, down from an average of 30.4% between 2021 and 2025, as sponsors reassess software companies vulnerable to AI disruption.
For private equity firms, that leaves a familiar problem with fewer easy solutions: They need to sell old investments to return capital to investors, while the market conditions making those exits difficult are also pushing new money toward the industry’s biggest managers.
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