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Business|Once Wall Street’s High Flyer, Private Equity Loses Its Luster
https://www.nytimes.com/2025/12/23/business/private-equity-stock-market.html
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As funds deliver mediocre returns and sheds investors, the industry is struggling to unload 31,000 investments, an increase over this time last year.
Dec. 23, 2025Updated 10:08 a.m. ET
Heading into 2025, private equity executives were predicting a new heyday.
After several years of high interest rates and a tough regulatory environment that had chilled deal making, the private equity industry was ready to start selling companies again and booking profits.
“This is one of the best business environments we’ve seen in a long time,” Harvey Schwartz, chief executive of Carlyle, one of the world’s largest private equity firms, said at a conference on Dec. 10, 2024. He predicted that 2025 would be a great year for deals.
While deal making did pick up toward the end of 2025, it was far from enough to solve private equity’s biggest problems: Many firms have been producing lackluster returns that lag the stock market; firms are struggling to raise money from investors; and they are saddled with a record number of companies they bought years ago, but have been reluctant to sell, fearing they won’t get the returns they promised investors.
With more than $7 trillion in investors’ money, private equity firms make money by buying companies with inexpensive debt and selling them for a profit. Typically, their investors are pension funds, endowments and other big institutions willing to tie up large sums for years in exchange for outsized returns that beat the stock market. The industry usually distributes returns to its investors by selling companies or taking them public.
Even with interest rates falling and the number of initial public offerings increasing in recent months, it has not made a dent in the industry’s backlog of at least 31,000 companies valued at $3.7 trillion, according to research from Bain & Company. That amount exceeds last year’s record of 29,000 companies valued at $3.6 trillion.
Many recent attempts by private equity firms to sell companies or take them public have stalled.
The private equity firm Thoma Bravo has failed repeatedly over the past several years to sell two companies it owns for an acceptable price. Thoma Bravo bought J.D. Power, the consumer analytics company, and ConnectWise, a software company, in 2019 and hasn’t found a buyer for either. This year, in light of the tough market, the private equity firm did not attempt another sale, according to two people briefed on the matter.
