More than half of limited partners expect the number of zombie funds—private equity vehicles that remain active beyond their intended lifespan—to increase over the next two years, according to a survey by Coller Capital.
The survey, which included 108 private capital investors overseeing approximately $2 trillion in assets, showed a sharp rise in concern compared with 2024, when just 28 percent of respondents anticipated an increase. Eric Foran, a partner at Coller Capital, said the level of concern was higher than expected.
The anticipated growth in zombie funds reflects the prolonged slowdown in private equity exits and deal activity. Many firms continue to hold assets acquired during the low-interest-rate environment, but higher borrowing costs and uncertain market conditions have made sales more difficult, Bloomberg reported. According to Bain & Co.’s 2026 midyear private equity report, a growing number of portfolio companies remain effectively trapped as buyout activity and exit volumes stay below historical levels. Concerns about economic uncertainty and the potential impact of artificial intelligence on software valuations have further weighed on transaction activity.