Zombie Fund
Private Equity glossary · Private Equity Fundamentals
Definition
A fund past its investment period that retains assets it cannot exit at acceptable values, often with diminished GP attention.
Zombie Fund in plain English
A private-equity fund normally has a life cycle: raise money, buy companies, improve them, sell them, and hand profits back to investors. A zombie fund is one that's gotten stuck — it's past the years when it's supposed to be making new deals, still holding companies it can't sell for a decent price, and its managers have often mentally moved on. It's like a group project that technically never ended: nobody's really working on it anymore, but it still exists and keeps collecting a small fee, quietly draining investors while going nowhere. Investors dread them because their money stays trapped with little attention and little hope of a good exit.
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