The private equity industry is experiencing a quiet reckoning as hundreds of midsize firms find themselves trapped between investors who have lost patience and portfolios of companies they cannot sell at acceptable prices. "There is existential risk for a number [of funds] because of the fundraising environment," said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. "If existing investors don't come and support them, new investors are highly unlikely to." According to data from Preqin, the average buyout fund that closed in 2025 spent 23 months fundraising, up from 16 months in 2021, and the total number of funds raised fell to 1,191 from 2,679 over the same period. New York's Vestar Capital scrapped plans for its eighth fund in late 2024 and has not invested in a new portfolio company since 2023. The firm's assets under management dropped from $7 billion fifteen years ago to $3.3 billion in 2024. Three-year annualized returns through June 2025 for the Cambridge Associates U.S. Private Equity Index stand at 7.4%, trailing the MSCI World stock index by 11 percentage points annually. The average holding period for buyout deals has stretched to 6.3 years from 5.1 years in 2020. Blue-chip megafunds continue raising capital normally, but smaller firms face existential pressure.

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An anonymous reader quotes a report from Bloomberg: Investors are souring on the bonds of software companies that service industries ranging from automotive to finance as fast-paced artificial intelligence innovations threaten to upend their business models. [...] Bond prices tumbled as advances in artificial intelligence rack up. Google announced plans to launch an AI assistant to browse for internet surfers Wednesday while a customer support startup, Decagon AI Inc., raised a new round of funding. Such developments are further stoking the angst about AI displacing enterprise software companies, driving a selloff in the sector's stocks and bonds across the globe. [...] Some say the AI fears weighing on software companies are overdone. "While point-solution software faces disruption risk, large company platforms with complex workflows and proprietary data are better positioned to benefit from AI-driven automation," wrote Union Bancaire Prive in its investment outlook for 2026 released this week. But a recent report by EY-Parthenon flagged that in the UK last year, software and computer services firms issued the highest number of warnings on earnings among listed firms. "Software multiples have compressed amid uncertainty around whether incumbents can defend pricing power and sustain growth in an AI-first work-flow environment," wrote Bruce Richards, chief executive officer and chairman of Marathon Asset Management, in a LinkedIn post last week.

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