Axis Intelligence Research highlights that private equity funds hold $7.958 trillion in gross assets as of Q3 2025, with 32,000 portfolio companies unsold. The industry’s 66.2 PELS score reflects a liquidity crisis driven by slow exits, not capital shortages. At the 2026 exit rate, clearing the backlog would take 12.2 years.

Key findings show 85.5% of PE assets are Level 3 valuations (model-priced), versus 15.9% for hedge funds. Software publishers now make up 13.4% of PE portfolios, up from 2.8% in 2013. The sector deployed $1.26 for every $1 returned in 2025, indicating poor capital efficiency. Fund growth (25,155 funds in 2025) outpaced asset growth, reflecting smaller, fragmented vehicles.

Regional data reveals the U.S. dominates PE deals (54.5% of global value), while exits remain stagnant. KPMG reports $1 trillion in H1 2026 deals, but count dropped 4.5%. The $570 billion exit value in 2025 was the slowest in a decade. The PELS score’s 66.2 rating underscores inventory clearance as the primary constraint.

The industry’s reliance on Level 3 valuations and small fund proliferation complicates liquidity. Experts warn that NAV figures are accounting outputs, not market realities. The backlog of unsold companies and low exit velocity highlight systemic challenges.