In 2026, a batch of GPs will stop fundraising

Vestar's retreat exposes a wider problem

It has been reported that Vestar Capital, a veteran U.S. private equity firm founded in the 1980s, has decided to halt efforts to raise a new flagship fund and will instead focus on managing its existing portfolio. According to Forbes, Vestar’s most recent fund, Vestar Capital Partners VII (2018), delivered an IRR of just 7.7%—well below the S&P’s roughly 14% over the same period—and the firm has reportedly not made new platform investments since 2023. Assets under management have slid to about $3.3 billion, less than half of what they were a decade ago, and Vestar’s seventh fund shows a DPI of only 0.6x as of mid‑2025 for one disclosed LP.

A growing army of “zombie” GPs

Forbes and PitchBook have documented a broader phenomenon: dozens, perhaps hundreds, of buyout firms that can no longer raise follow‑on capital and are effectively in “zombie” mode—managing aging portfolios for fees while new investing is paused. It has been reported that at least 20 firms with roughly $10 billion scales have been cast into this category, including names such as Onex Partners and Madison Dearborn Partners; PitchBook suggests the true number across North America and Europe is much higher. EQT’s CEO recently warned that only a minority of the ~5,000 GPs that raised funds over the past seven years may be able to raise again in the next 5–10 years. High interest rates, a tougher exit market and increased regulatory and cross‑border scrutiny have compounded the problem.

Why it matters — winners, losers and implications for China

The contrast with a handful of mega‑firms is stark. Blackstone (黑石) and other top managers posted record exits and fundraising in 2025, pulling in a disproportionate share of fresh capital. This market polarization squeezes mid‑sized managers and concentrates deal flow and premium assets at the top. In China, too, the headline figures mask concentration: Touzhong JiaChuan (投中嘉川) reports 170 VC/PE‑backed Chinese listings in 2025 and RMB 431.8 billion in paper exits, yet returns are heavily skewed toward the biggest deals—the top 10 IPOs accounted for half the total. So who is left behind when the tide goes out? The answer: mid‑market GPs and their LPs, whose legacy, highly leveraged bets from the low‑rate era are suddenly difficult to sell.