Restructuring

Over the last decade, Kroll’s Fund Solutions practise has evolved and grown into a core pillar of modern restructuring. What began as a response to isolated end-of-fund issues has developed into a structural answer to deeper changes in private markets, changes that are now reshaping how capital is managed, returned, and ultimately trusted.

The last five years have exposed a reality that had been building quietly for much longer. Private capital doesn’t just need better ways to be deployed, it needs more effective and credible ways to manage exit delays and exit strategies.

Private markets are facing unprecedented liquidity stress. Average hold periods have increased from 5.3 years in 2020 to over seven years by 2025, while the value of aging, unrealised portfolio companies has surged to $4.3 trillion (up from USD1 trillion in 2016). Distributions have increasingly lagged expectations, and LP-led secondary sales are occurring at record levels.

 

From Crisis Response to Structural Necessity

In the years following the global financial crisis, private markets expanded rapidly. Assets under management multiplied, new managers entered the market, and cheap debt supported rising valuations. For much of the 2010s, the assumption was simple: exits would come, multiples would hold, and time would solve most problems.

That assumption began to break down well before the market volatility of the past few years. Holding periods had lengthened, exits slowed, and distributions increasingly lagged capital calls. By the time global uncertainty intensified - driven by the end of the Zero-Interest-Rate-Period (ZIRP), rising rates, geopolitical tensions, tariff impacts, and the cost of capital - the pressure points were already visible.

Kroll’s Fund Solutions advisory practise was established as a pragmatic response to these frictions. However, over the last five years it has become something more fundamental: providing a structural solution for the mid to end lifecycle of private capital, particularly where traditional fund structures no longer fit the assets they hold.

 

The Rise of the “Aged Fund” Problem

One of the clearest indicators of this shift is the growing volume of aged funds. If you look through regulator-reported data and market sources, a consistent pattern emerges across jurisdictions, with high single-digit to low-teens percentages of private fund AUM now held in vehicles more than eight years old.

That matters not just to Limited Partners (LPs) and General Partners (GPs), but to regulators as well. Capital that becomes stuck inside a jurisdiction eventually discourages new capital from flowing in. Liquidity isn’t just an investor issue, it is a market credibility issue.

Importantly, many of these funds are not distressed in the traditional sense. They are solvent, operational, and still hold assets with potential value. What they lack is structural alignment: the cost base, governance model, and incentives no longer match the remaining asset profile.

This is where Kroll Fund Solutions has increasingly stepped in, not as an accelerated liquidation, but as a form of controlled, solvent restructuring to right size the cost base, extend the runway to realise the assets and realign performance incentives commiserate with the underlying investments.

 

What’s Driving Demand Today

Several distinct but reinforcing trends are shaping demand for fund solutions in 2026.

Firstly, market conditions have necessitated a new approach to fund maturity issues and resultantly, structural tools have matured. Continuation funds and secondaries are now well-established parts of the private markets toolkit. They work extremely well for prime assets or for LPs seeking optionality. But they are not universal solutions. Residual, complex, or long-dated assets often require something different, such as a bespoke structural approach that reduces costs, stabilises governance, and maximises value over time.

Also, market headwinds have accelerated decision-making. Smaller and mid-sized fund platforms, in particular, are reassessing their future. Founders who once expected to raise successor funds are increasingly deciding not to continue, often without having succession plans in place. That has led to abrupt platform wind-downs and the need for replacement managers to step in and manage assets to exit.

Finally, the expectations of LPs have also changed. They are more focused on transparency, governance, and alignment than ever before. Underperformance alone is rarely the trigger for intervention; poor reporting and lack of visibility are. As exits stretch further into the future, patience without information has worn thin.

 

A Distinct Evolution Within Restructuring

What makes Kroll’s Fund Solutions practise distinct from traditional restructuring is the approach. Rather than focusing on insolvency or forced outcomes, fund solutions operates in a solvent context. The emphasis is on right-sizing, not fire sales; on governance, not disruption; on alignment, not confrontation. It borrows from the discipline of restructuring but applies it to a fundamentally different asset class, one where time, regulation, and investor trust are central variables.

In practice, this can involve taking over asset management roles through our regulated investment management platform, stepping into fund or portfolio company directorships, restructuring fee and cost models, and actively managing assets toward exit, typically over a two-to-three-year horizon. The objective is not speed for its own sake, but value preservation and realisation.

 

Fund Solutions is a Signal That Private Markets Are Maturing

Looking ahead, fund solutions is unlikely to be a temporary response to a difficult market cycle. Instead, it is becoming a permanent feature of private capital markets. Demand is likely to continue rising. Exit constraints, elevated interest rates, and ongoing uncertainty will keep pressure on ageing funds and underperforming platforms. We expect that fund solutions will formalise its place alongside continuations and secondaries as a third pillar of liquidity, one designed specifically for end-of-life complexity rather than growth-stage optimisation.

Longer term, its success may reshape expectations altogether. As investors and regulators become more comfortable with structured, solvent wind-downs and replacement management models, the stigma historically attached to fund closures is likely to fade. Closing a fund well may become as important as launching one successfully.

Ultimately, the rise of fund solutions reflects a private markets industry growing more sophisticated about itself. For years, the emphasis was on fundraising, deployment, and scale. Now, attention is shifting to durability, alignment, and outcomes. Capital still needs to be raised, but it also needs to be returned, responsibly and transparently.

In that sense, the demand for and success of fund solutions advisory is not a sign of stress. It is a sign of maturity. And as private markets continues to evolve, it is increasingly clear that restructuring’s newest frontier lies not in distressed companies, but in the structures that hold them.

 

About Sam Cole

Sam Cole is a Managing Director based in Kroll’s London office and leads the EMEA Fund Solutions business. Kroll’s Fund Solutions practice provides advisory and discretionary asset management services for illiquid or distressed investments, including rationalizing management cost structures, restructuring single investments, and portfolio realizations. This is achieved through realisation vehicles and other structure solutions for (i) end of fund life solutions, (ii) replacement GP and (iii) director-led realisations. We advise both GP and LP’s. Kroll’s asset management platform is regulated by the SEC, CIMA (Cayman Islands) and FSC (Mauritius), and can act as delegated portfolio manager for EU and UK domiciled funds.