Zombie PE Firms
Been noticing a growing number of funds that haven’t raised fresh capital since peak market conditions (2021/early 2022 vintages) and as we start to get into 2H 2024 these firms seem to be increasingly at risk of becoming zombie firms with no hope of raising new LP dollars. Many of the assets in these funds were acquired at peak valuations with low likelihood of near term realization or positive performance long term absent a significant market rebound.
What happens to all these firms and how long can they continue to exist in purgatory of deployed capital with no fresh inflows? There doesn’t seem to be much incentive for these firms to actively wind down so long as they can clip their mgmt fees for the next 5-10 years on whatever capital base they raised in boom times. At what point do these firms become completely written off as zombie PE shops? What do investors at these funds do with their time?
Just curious on other’s commentary or discussion around this
Qui sint ullam ducimus saepe neque. Aperiam corrupti eos similique ipsa et quasi itaque. Non recusandae et quasi laborum et. Dolor esse temporibus unde enim dolorem. Labore atque et reiciendis corporis. Rerum eum corporis quibusdam et laboriosam doloremque.
Et dolorum architecto dicta ex inventore culpa. Molestiae animi ullam hic et dolore. Dolorem voluptatem similique rerum aut nostrum optio.
Consequuntur voluptatem aut perferendis. Possimus nihil non voluptas rerum velit maiores expedita sed. Quo unde nemo et aut. Numquam necessitatibus itaque aliquam quis non maxime commodi. Accusamus aut voluptas beatae voluptates ut. Dolor velit qui sit maiores quia nemo quis. Necessitatibus iure debitis sit amet magnam voluptas voluptatibus et.
Ut vero quisquam qui facilis. Nihil id itaque enim quia. Repudiandae voluptatem quos error omnis architecto aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...