Are We Going To See a Bunch of Zombies In Private Markets?
In a recent Financial Times interview, EQT chief executive Per Franzén didn’t mince words about the state of private markets.
He argued the industry is overcrowded and warned that many players won’t make it through the next decade. Of the more than 15,000 private markets firms in existence, Franzén said only about 5,000 have raised a fund in the past seven years, and he expects “probably less than half” of those will do so again. Along the same lines, he predicted 50 to 100 dominant firms could attract 90 percent of new investor capital, while thousands more drift into “zombie” territory.
Franzén’s warning reflects a broader reckoning taking shape across private markets. At a Barclays conference in September, Apollo president Jim Zelter cautioned that “many, many PE funds” may have unknowingly closed their last fund, as consolidation accelerates around the industry’s largest players. At the same conference, KKR Chief Financial Officer Robert Lewin delivered a similar message, predicting a wave of downsizing as smaller firms grapple with shrinking fund sizes and stubborn cost structures. For those unable to adapt, he suggested, the outcome could be that they "go away forever".
More PE Funds Than McDonald's Restaurants
At a more recent Bloomberg event, KKR’s Alisa Wood highlighted the sheer scale of the industry, noting that there are now more private equity funds in the United States than McDonald’s locations, roughly 19,000 compared with 14,000. The comparison may be tongue-in-cheek (like comparing apples and Big Macs?), but it does capture just how crowded the market has become.
