Weekly Private Equity Edition
Volume 11
SEQH CAPITAL RESEARCH
Private Equity Edition – Weekly Brief
Week Ending January 30, 2026
1. Big Picture: A Barbell Market
Private equity closed January in a sharply bifurcated state:
Capital is flooding into top-tier platforms and specialized strategies (GP-led, co-invest), while:
Mid-sized and emerging managers confront a genuine survival problem as exits, fundraising, and performance diverge.
Key signals:
Global PE fundraising 2025: ~$491B, down ~11% YoY, but heavily concentrated in the largest funds.
Top 10 U.S. managers captured ~46% of commitments through Oct‑25 (vs. 35% in 2024).
U.S. PE fund closes in 2025: 327 – lowest in more than a decade; first-time funds: just 48, the weakest since 2010.
From 2022 to Sept‑25, PE returned ~5.8% annualized vs. ~11.6% for the S&P 500, and distributions from 4‑year‑old funds are at decade lows – a combination now feeding the “zombie fund” narrative.
2. Capital Formation & Secondaries: The Winners
Leonard Green – Sage Equity ($3.6B)
A defining raise for GP‑led secondaries:
Sage Equity Investors I closed at >$3.6B vs. $1.5B target.
Focus: large, single- and multi‑asset continuation vehicles; backing other GPs’ trophy assets.
Investor mix: pensions, SWFs, endowments, insurers, family offices; meaningful GP commit.
Implications:
Confirms GP-led secondaries as a core, scaled strategy – not niche.
Gives LGP “check size” to anchor the largest continuation deals, in a market already at ~$100B+ annual GP‑led volume.
Goldman Sachs – PECP IV Co-Invest ($2.8B+)
Goldman Sachs Alternatives closed PECP IV above $2.8B.
Already ~30% deployed across ~13 deals.
Provides LPs fee‑efficient access (low/no fees, reduced carry) to sponsor-led buyouts via Goldman’s co‑investment network.
Implications:
Co-invest is now a core tool for LPs trying to stay in private equity while improving net returns.
For everyday investors, expect these strategies to show up indirectly via interval funds, listed alts, or future 401(k) vehicles rather than direct fund access.
EQT + Coller Capital ($3.2B combination)
EQT agreed to acquire Coller Capital for ~$3.2B (mix of shares and contingent cash).
Coller brings ~$50B AUM, including:
$14.2B flagship CIP IX (closed Dec‑25).
Four evergreen secondaries products (~$4.1B NAV).
Implications:
Secondaries are being “industrialized” inside multi‑strategy platforms.
EQT can now offer primary PE, infra, real estate, and full-spectrum secondaries under one roof – a clear response to LPs consolidating managers.
3. Zombie Funds & Exit Dynamics
Zombie pressure is now front and center:
Over $1T of unsold assets still sitting in PE portfolios globally.
Roughly 40%+ of LPs report exposure to at least one zombie fund.
EQT’s CEO estimates “as many as 80%” of competitors could end up effectively zombified – unable to raise a next fund or exit assets cleanly.
Key drivers:
Exit drought 2022–23 led to:
Extended holding periods (median ~3.9 years vs. ~3.0 in 2022; ~30% of assets held 7+ years).
Underperformance vs. public markets and delayed distributions.
Many GPs remain anchored to 2021 peak valuations and resist taking “downside” exits.
But exits are finally accelerating:
U.S. PE exits through Oct‑25: ~1,300 deals, $621.7B vs. $379.6B for all of 2024.
Half of GPs now cite exits as their top 2026 priority; only ~8% say they’ll wait for better conditions.
Takeaway:
2026 is shaping up as a “sort‑the‑pack” year:
Strong managers will use this exit window to clear portfolios, crystallize DPI, and re‑earn LP trust.
Weak managers will continue to warehouse aging assets and drift further into zombie territory.
4. Liquidity Engineering: NAV, Fund-Level Leverage & Retail
