WTT: Can Private Markets Normalize?

Private equity faces a structural capital recycling crisis as exit activity fails to keep pace with robust fundraising and acquisition growth. While the industry has tripled its unrealized value to $3.2 trillion over the last decade, the supply of unsold companies—now totaling 29,000—overwhelms current buyer demand. Strategic acquisitions have remained flat for ten years, and the IPO market has lost its appeal for CEOs, leaving sponsor-to-sponsor trades as the only functional exit channel. This bottleneck forces a shift toward permanent capital structures, such as continuation vehicles, and signals an inevitable shakeout among underperforming firms. As holding periods exceed six years, limited partners must reduce commitments and rethink portfolio construction. The industry is moving toward a fundamental transformation where only the largest, most efficient funds thrive, while the era of rapid capital recycling remains a thing of the past.