1. Aerospace and defence: a breach in the exit wall
On 26 August, PitchBook documented the one clear exception to the exit freeze. In aerospace and defence, exit value for PE-backed companies rose from $17.7bn for the whole of 2025 to $26.8bn in the first half of 2026 alone. The sector was carried by five substantial listings, against none in the second quarter of 2025.
The largest was DPC Holdings — better known as Doncasters — a British manufacturer of precision cast components and nickel- and cobalt-based superalloys for jet engines and industrial gas turbines. The company listed on 25 June on the New York Stock Exchange, not in London, under the ticker DPC, at a $4.9bn valuation. It went out from a position of strength: 27.86 million shares placed at $33, above the $28–32 indicative range, on an upsized deal from the 23.3 million shares initially planned, with the Qatar Investment Authority subscribing $75m in a private placement.
Its ownership history is worth the detour, because it tells the story of the past decade on its own. Doncasters belonged to the Royal Bank of Scotland before Dubai International Capital acquired it in 2005 for around £700m. The Emirati fund became mired in the asset, and a 2020 debt restructuring transferred ownership to creditors — among them J.F. Lehman & Company, the New York manager specialising in aerospace and defence, which took control. Since then more than $170m has gone into modernising plants and expanding capacity, and revenue has doubled. Six years of ownership, an asset taken over from creditors and turned around through industrial work rather than leverage. And a genuine exit: after the listing, J.F. Lehman-affiliated funds retain only 13.5% of the capital.
Three further deals follow, all likewise on the New York Stock Exchange. Global Medical Response, the Texas-based emergency medical services company backed by KKR, valued at $3.4bn. It runs ground ambulances and a fleet of medical helicopters and aircraft, and it is that fleet which places it within the sector’s perimeter. Then Applied Aerospace & Defense ($3.4bn), owned by Greenbriar Equity Group and listed on 2 June under the ticker AADX, raising $650m. Finally Aevex ($2.2bn) — drones, loitering munitions and autonomous surface vessels — owned by Madison Dearborn Partners and listed on 17 April under AVEX, raising $320m. In total the quarter counts 27 exits, up 17.4% on the previous quarter and 22.7% year on year; commercial aviation accounts for 40% of the value.
And this is where the word “exit” deserves a closer look. Listed on the NYSE since 13 May under the ticker GMRS, Global Medical Response placed 31.9 million shares at $15 — roughly $479m gross and $455m net — having targeted as much as $797.9m within a $22–25 range.
That $455m was not enough to fund the transaction, and the prospectus sets out the structure. Concurrently with the offering, funds affiliated with KKR, Ares Management and HPS subscribed $500m of warrants — 33,333,333 securities priced at the IPO price, exercisable at $0.01 — the proceeds of which are applied entirely to debt repayment. The document does not disclose how those $500m are split between the three subscribers.
The treatment of the Series B preferred stock is more revealing still. The shares held by KKR were exchanged for 12,381,051 warrants exercisable at $0.01: not a dollar received. Those held by Ares and HPS were redeemed in cash for $299,447,782, funded from the net proceeds of the offering. The money raised from public investors therefore went to the two credit funds, not to the sponsor. The balance — some $670m of the 2032 first lien term loan — was repaid using the private placement.
In other words, KKR sold nothing and received nothing: it converted its preferred stock into warrants, then put fresh money back in to deleverage the company. Following these transactions, the prospectus states that the KKR-controlled vehicle — which also holds Ares’ interests — commands roughly 77.6% of the voting power; the end-June 13G reports close to 81% of Class A shares on an as-converted basis. GMR is classified as a “controlled company” under NYSE rules.
Applied Aerospace & Defense follows the same principle. It is a buy-and-build construction — the merger of Applied Aerospace and PCX Aerosystems in December 2025, followed by the acquisition of Vestigo Aerospace, for 2025 revenue of $498.8m, up 24.8% — and Greenbriar likewise retains around 81% of the capital after listing, under the same controlled-company status.
The contrast with Doncasters is striking, and it comes down to three figures: 13.5% retained by J.F. Lehman, 81% by KKR, 81% by Greenbriar. One of the three largest deals is a disposal in the proper sense — priced above its range, with a sponsor stepping back. The other two are listings in which the fund keeps control. At Global Medical Response the sponsor received strictly nothing: its preferred stock was converted into warrants, and the only cash redemption went to two third-party lenders.
The distinction matters, because “exit value” records the valuation of a company that has reached a liquidity event, not the proceeds of a sale. This is not an academic point: it is precisely the gap between the headline statistic and the DPI investors are waiting for — and the subject of the next section.
“There’s a heavy spotlight on the industry in the wake of SpaceX’s IPO and the war in Iran,” says Jim Corridore, lead industrials research analyst at PitchBook. Yet he describes a driver more prosaic than geopolitics: ageing commercial fleets, which durably feed the spare parts and maintenance services chain — precisely the segments where private equity is established. Conversely, deal value fell from $11.1bn to $6.5bn despite a 10.9% rise in deal count: the market is shifting towards mid-sized cheques, the large targets already sitting with listed prime contractors.
What remains is to gauge what this breach really means. PitchBook presents it as “a welcome relief for an asset class clogged with ageing companies”. But aerospace is exiting because the equity market has reopened for one specific sector, driven by a geopolitical cycle and a fleet cycle. The industrial cycle can be worked: anticipating it is the very craft of private equity, and J.F. Lehman, a long-standing sector specialist, did not end up there by accident. What cannot be commanded is the listing window — the one that sets the timing and the price, and that took Global Medical Response from a $22–25 range to a $15 offering.
Sources: PitchBook — Aerospace and defense PE exit value already beat last year’s total (26 August 2026) · PitchBook — Q2 2026 Aerospace & Defense Report · Reuters — KKR-backed ambulance giant GMR raises $479 million in US IPO · GMR Solutions — Form 424B4, SEC (12 May 2026) · PR Newswire — J.F. Lehman & Company-Backed Doncasters Completes Successful IPO Listing (25 June 2026)
📖 Going further: 6. How private equity can help Europe reach a 5% of GDP defence effort (analysis in French)
2. The $860 billion in zombie companies
On 25 August Fortune devoted an article to the figure that measures the congestion. Of the 13,509 US companies held by PE funds, 33.8% have been held for five years or more. That puts roughly 4,600 companies in the five-years-and-over cohort. Kyle Walters, private equity analyst at PitchBook, describes them as having entered a zombie state — operational, solvent, but with no identifiable path to exit — with a gradation worth restoring: at five years the company is “feverish”; at ten it is a problem asset.
The $860bn figure belongs to an entirely different measure, and the confusion is easy to make. It shares neither the threshold nor the unit: at the end of 2025, roughly 40% of the net asset value of US PE-backed companies — more than $860bn — had been held for more than seven years, the third consecutive annual increase and the highest level since 2016. Net asset value is the price managers themselves assign to holdings they have not yet sold. Fortune sets that amount against an industry of $3.8tn in assets under management, without specifying whether the total covers the US market alone or the global one: the comparison gives an order of magnitude, not a usable ratio.
A caveat. The five-year threshold, taken on its own, proves little: there have always been holdings kept beyond it, and the three-to-five-year duration is a sales promise more than an observed norm. It is the second measure that carries the thesis, and by its slope rather than its level — three consecutive years of increase. A methodological note: PitchBook does not publish a fine breakdown by vintage bucket; we have a company count at five years and over, and a share of value at seven years and over, with no intermediate detail and no bridge between the two.
The origin is dated and acknowledged: the zero-rate years. “Post-COVID in 2023, when you get rates going to their highest in 40 years, you’re no longer able to rely on that financial engineering,” Walters explains. “So, when that comes, not only have you bought these companies at the 2020-2021 peak, when valuations were at their highest and capital was next to nothing, you have to create operational improvements when it’s hardest to do so. Pair that with companies that were bought at 12x, and are maybe worth 10x, and you’ve dug yourself a bit of a hole, and there’s no real way to get out.”
Walters declines catastrophism: in his view it would take “multiple layers” of risk stacked on top of one another for the phenomenon to become systemic, and managers retain the advantage of timing as long as nothing forces their hand. His conclusion is no less blunt: “These companies can’t sit in the portfolio forever. They have to decay in one way or another. There is always an outcome — one is better than the other — but it’s inevitable.”
Corroboration. KPMG’s data confirm the blockage by another route. Its second-quarter Pulse of Private Equity calls exit flow subdued and counts 1,315 global exits in the first half of 2026, the slowest pace in over a decade by deal count.
By value the picture is less bleak: $570bn at mid-year, against $1.2tn for the whole of 2025. The market is therefore exiting less often, but in significantly larger size. The detail is telling — 76 public listings account for $112.7bn on their own, while 659 corporate acquisitions represent $262.5bn and 580 sponsor-to-sponsor buyouts $194.8bn. This is precisely the profile described in the previous section: a handful of large deals make the number while the mass of holdings stays in the portfolio.
Sources: Fortune — Private equity’s $860 billion zombie company problem (25 August 2026) · PitchBook — The zombie fund problem is getting worse · PitchBook — Q3 2026 Private Equity’s Zombie Problem · KPMG — Pulse of Private Equity Q2’26
📖 Going further: 18. Time value in private equity (analysis in French)
3. a16z raises $1.1bn for hardware: venture capital rediscovers the factory
Andreessen Horowitz announced on 28 August that it had raised $1.1bn for its Machine Age fund, its first vehicle dedicated to hardware infrastructure. The targets: AI processors, memory, networking equipment, storage, robotics and data centres, through to complete systems — a definition broad enough to stretch from the data centre to the household appliance.
The rationale advanced is a physical constraint. Every link in the hardware supply chain is said to be capacity-constrained, from chips to memory to power, and the sector’s usual 20% to 30% annual growth cannot keep pace with demand rising in triple digits. General partners Martin Casado and Raghu Raghuram will lead the strategy, across both early and growth stages.
The signal is notable for a firm that built its doctrine on the phrase “software is eating the world”: hardware has gone from a marginal sliver to more than 20% of its deal flow. AI investment is shifting a little from the model to bricks and copper.
Sources: TechCrunch — a16z creates a $1.1B ‘Machine Age’ fund (28 August 2026) · PitchBook — A16z’s new $1.1B fund admits hardware is eating the world, too (28 August 2026)
📖 Going further: 30. VC vs. Buyout: The American Match in Five Rounds
4. Tudigo: French crowdfunding meets the downturn
Tudigo, the Bordeaux-based platform founded in 2015 under the name Bulb in Town, was placed in receivership by the Bordeaux commercial court on 5 August, after a suspension of payments recorded on 31 July. Its funding trajectory sums up the sector’s reversal: €41m in 2024, €29m in 2025, €7.3m over the first eight months of 2026. The company points to a market reversal following a phase of hypergrowth, compounded by an internal governance crisis that emerged in the autumn of 2024.
On investors’ money, Tudigo states that funds are held in segregated accounts, separate from the investment vehicle of the projects concerned or held on the books of payment services provider Lemonway. The proceedings set a tight timetable: takeover bids must be filed by 14 September, for review by the court on 30 September.
The case reaches beyond the single company. French crowdfunding was one of the retail investor’s routes into private assets, carried by low rates and an appetite for direct investment. Rising rates and mounting defaults on property projects have closed that parenthesis.
Putting it in perspective. According to the Forvis Mazars–France FinTech barometer published in March 2026, French crowdfunding raised €1,763m in 2025, of which only €170m in equity investment, against €202.5m in 2024. It is the only major segment in decline, while lending rises to €1,414.8m and property stabilises at €845m. The barometer describes crowdequity under pressure: reduced appetite for financing innovation and start-ups, greater selectivity, weakened support schemes.
Measured against that compartment, Tudigo’s position changes in nature. Its €41m raised in 2024 and €29m in 2025 amount to roughly a fifth of the equity segment — an order of magnitude to handle with care, since Tudigo’s fundraising does not fall exclusively under equity. Its failure is therefore no peripheral incident: it is one of the leading players in the market’s most fragile compartment that is stopping.
Sources: Boursorama / AFP — Crowdfunding platform Tudigo placed in receivership (17 August 2026) · Les Échos, “La plateforme de crowdfunding Tudigo en redressement judiciaire”, Sandra Pirrmann, 18 August 2026 edition (print reference) · Forvis Mazars / France FinTech — 2025 Crowdfunding Barometer in France (March 2026)
📖 Going further: 12. Private equity really does open up to retail investors (analysis in French)
References of the week
Regulatory filings consulted (SEC / EDGAR). The ownership and financing figures in section 1 come from the companies’ own filings, not from press reports alone.
- GMR Solutions Inc., Form 424B4 — final IPO prospectus, 12 May 2026. Exchange of KKR-held Series B preferred stock for 12,381,051 warrants at $0.01; cash redemption of $299,447,782 for the preferred stock held by Ares and HPS; concurrent private placement of $500,000,000 subscribed by funds affiliated with KKR, Ares and HPS, with no split disclosed; 77.6% of voting power held by the KKR-controlled vehicle following the transactions.
- GMR Solutions Inc., Schedule 13G — stake held by KKR-managed entities as at 30 June 2026, approximately 81% of Class A shares on an as-converted basis.
- DPC Holdings Ltd (Doncasters), Schedule 13G — residual stake of J.F. Lehman & Company-affiliated funds after the listing, 13.5% of the capital.
Studies and reports
- PitchBook, Q2 2026 Aerospace & Defense Report: More Deals, Smaller Check Sizes
- Fortune, Term Sheet — Private equity’s $860 billion zombie company problem, Allie Garfinkle, 25 August 2026
- PitchBook, Q3 2026 Private Equity’s Zombie Problem, Kyle Walters
- KPMG, Pulse of Private Equity Q2’26, PitchBook data as at 30 June 2026
- Forvis Mazars and France FinTech, 2025 Crowdfunding Barometer in France, March 2026
