Between two‑thirds and nine‑tenths of private‑equity buyout funds that began deploying capital in the 2019‑2021 boom are expected to miss their original internal‑rate‑of‑return (IRR) targets, with average IRRs projected at only 7‑8% percent, according to Private Equity Wire’s report of a Financial Times‑cited survey.
Survey of seasoned investors paints a grim picture
The survey gathered estimates from five experienced private‑equity investors and senior executives. All five concur that the vintage years – marked by record‑low interest rates and abundant financing – are now likely to under‑perform. The range of miss‑target estimates spans 66 percent to 90 percent of funds launched in that period.
One senior industry executive, quoted in the Private Equity Wire article, said the average IRR for those vintages will sit at only 7‑8 percent, far below the high‑teens net IRRs that buyout funds traditionally aim for. Two other investors in the same survey projected returns in the low double‑digit range, which the source describes as “materially below” the high‑teens benchmarks.
Exit activity remains weak despite massive asset sales
Private‑equity firms sold approximately $386 billion of portfolio assets in the first half of 2026, a figure supplied by Bain & Company and reported by Private Equity Wire. However, the same source notes that exit activity in H1 2026 was still below the level recorded in the comparable period a year earlier, indicating that the sales were not translating into the expected cash returns for investors.
Compounding the exit shortfall, the industry returned less than 15 percent of net assets to investors in 2025 – the fourth consecutive year of sub‑15 percent distributions. That figure contrasts with a 25 percent decade‑average distribution rate, highlighting a persistent gap between realised cash returns and historical norms.
What the numbers mean for limited partners
Limited partners (LPs) that committed capital to 2019‑21 buyout funds now face the prospect of lower cash‑flow expectations and longer holding periods. The miss‑target range of 66‑90 percent suggests that a majority of these funds will need to either extend their investment horizons or accept lower-than‑promised performance.
For LPs whose allocations are benchmarked against high‑teens IRR targets, the projected 7‑8 percent average represents a shortfall of roughly 10 percentage points. In practical terms, a $100 million commitment that was expected to generate $200 million in proceeds (a 100 percent multiple) may instead deliver only $140 million, assuming a 7‑8 percent IRR over a typical ten‑year fund life.
Context and unanswered questions
The survey does not break down miss‑target probabilities by fund size, geography, or sector focus, leaving LPs to infer risk based on the aggregate range. Moreover, the source does not disclose the identity of the senior executive who provided the 7‑8 percent average IRR estimate, nor the specific methodology used to arrive at the miss‑target percentages.
Another gap is the lack of forward‑looking guidance on when the exit drought might ease. While the $386 billion asset‑sale figure shows that dealmakers are still active, the lower‑than‑prior‑year exit volume suggests that liquidity events remain constrained.
Key figures at a glance
| Metric | Value | Unit | Period | Source |
|---|---|---|---|---|
| Funds expected to miss IRR targets | 66‑90 | percent | 2019‑2021 vintage | Private Equity Wire (FT survey) |
| Projected average IRR | 7‑8 | percent | 2019‑2021 vintage | Private Equity Wire (senior exec) |
| Portfolio assets sold H1 2026 | 386 | billion USD | First half of 2026 | Private Equity Wire (Bain & Company) |
| Net‑asset distributions 2025 | <15 | percent of net assets | 2025 | Private Equity Wire |
Investors should monitor forthcoming fund‑level performance updates and any shifts in exit activity that could alter the projected IRR trajectory. Until more granular data emerge, the broad consensus points to a challenging return environment for the 2019‑21 private‑equity boom cohort.