Private Equity Challenges: Unsold Assets and Exit Logjam

Adeel Shafiqullah from Sculptor Capital examines how the private equity LBO model has been disrupted. With interest rates roughly double what they were during the 2020-2021 vintage, many portfolio companies are struggling to grow into their capital structures. He highlights that approximately $3.7 trillion in unsold assets sit with PE sponsors across 32,000 companies, with average holding periods extending from 5 to 7 years. Traditional exit channels — secondary buyouts, strategic sales, and IPOs — are all more constrained today.