Private Equity's Celebrity Glow-Up Masks $3.7 Trillion Exit Backlog

Private equity is getting an A-list PR boost this summer as celebrities date dealmakers, even as the $7 trillion industry wrestles with a fundraising slump and a $3.7 trillion backlog of unsold portfolio companies.

"Private equity has always been cyclical, and I would say now we're in a little bit of a down part of the cycle," said Steven Kaplan, a professor at the University of Chicago's Booth School of Business who studies private equity returns.

The tabloid glow-up — Reese Witherspoon with Oliver Haarmann, founder of Searchlight Capital Partners with more than $17 billion in assets under management; Nicole Kidman poolside in Portofino; Olivia Rodrigo picnicking in a park; Andy Cohen announcing he's dating one — arrives as MSCI estimates US private equity funds returned 5.8 percent annualized between 2022 and the third quarter of 2025, versus 11.6 percent for the S&P 500.

The industry's exit engine has stalled. Exits fell to 321 in 2025 from a 2021 peak of 1,210, leaving funds holding 31,000 companies valued at $3.7 trillion, and global fundraising is on track to fall below $600 billion this year.

The Exit Slowdown Behind the Glamour

The celebrity attention comes as the industry's core engine — buying companies, boosting profits, and selling them — has seized up. The Federal Reserve's 5.25 percentage point rate increase between March 2022 and July 2023 made leveraged buyouts and exits harder, and a persistent gap between what buyers and sellers think aging portfolio companies are worth has kept deals from closing. Exit value peaked at $527.8 billion in 2021, fell to $100.8 billion in 2023, and recovered only to $243.9 billion in 2025, according to the Wall Street Journal.

The backlog has spawned a rise in "zombie funds" — vehicles 10 or more years old that still hold unsold companies. Assets under management in North American zombie funds grew from $372 billion in 2021 to a record $441 billion in 2024, and such funds now return about 44 cents on the dollar to investors, down from a historical 53 cents.

Fundraising Slump Pressures Institutional Investors

The liquidity crunch has squeezed the pension funds, university endowments, and sovereign wealth funds that anchor the asset class. Global private equity fundraising across all strategies fell for a third straight year in 2024, and 2025 is shaping up weaker still: firms raised $502.1 billion through the third quarter, on pace for less than $600 billion, versus a peak of $840.9 billion in 2023. US buyout funds raised $214 billion through the third quarter, on track to underperform the $360 billion they raised in 2024.

The celebrity dating trend offers an unexpected marketing tailwind. "If you live in the celebrity bubble, party after party, with the same people — the same 25 people — life gets really boring," said Kevin O'Leary, the businessman and "Shark Tank" panelist who has served on middle-market fund Genstar Capital's advisory board. "When you end up with a private-equity guy, your life gets far more interesting."

Not everyone is convinced the glow-up will translate into commitments. "You could probably pick any profession and say that there's a handful of people that are dating celebrities," said Kevin Cassidy, a 28-year-old former private-equity associate at New Mountain Capital who now runs Hanging Valley Holdings.

The industry's path back to health runs through exits, not paparazzi. If interest rates decline and the US avoids a slowdown, 2026 could be a better year for dealmaking, but clearing the overhang of aging, overvalued portfolio companies will be a multi-year process. Bain & Co.'s global private equity chair has called it a "5+ year problem," warning that pressure on institutional investors for liquidity will persist into the next several years.

This article is for informational purposes only and does not constitute investment advice.