Private equity’s got a zombie problem.
No, not the rancid, brain-devouring living dead of horror movies—we’re talking about zombie portfolio companies, which have been proliferating across the $3.8 trillion private equity industry. Consider these numbers: Among the 13,509 companies backed by U.S. PE firms, about 33.8% have been held for five years or more, according to new PitchBook data. This means there are north of 4,500 PE-backed companies in some zombie stage right now, which shakes out to a wild number: There’s about $860 billion in zombified net asset value in U.S. PE, among funds that are more than seven years old, PitchBook estimates.
