That shift should be of interest to retail investors gaining exposure to private equity through interval funds, evergreen vehicles, or model portfolios, since the underlying funds backing those structures vary widely in how much cash they have actually returned versus what they report on paper.
Exit routes remain largely closed
IPO windows are narrow, strategic buyers are selective, and pricing disagreements continue to stall sponsor-to-sponsor sales.
With traditional exits scarce, continuation vehicles and GP-led secondaries have become the default way sponsors return cash to investors, even as limited partners grow more wary of the conflicts of interest those structures can raise. Advisors fielding questions about liquidity timelines in private market allocations should expect that bottleneck to persist through the second half of the year.
Artificial intelligence is cutting both ways across portfolios. Technology, long PE’s strongest-performing sector, is becoming more complicated as AI undercuts the economics behind legacy software holdings, narrowing exit options for sponsors holding older assets.
The report cites private credit managers openly discussing a “SaaS-pocalypse,” in which AI-native competitors erode the recurring-revenue models that much of software valuation depends on. At the same time, sponsors using AI to improve operations inside portfolio companies are finding it gives them an edge in both fundraising and exit negotiations. Healthcare remains the most resilient sector for deployment, with take-privates and roll-up strategies continuing at a steady pace.