Private equity's three-year deal slump has worsened one of the industry's longstanding problems: billions of dollars worth of aging, underwater funds that continue to cost investors' money. The slowdown in mergers and acquisition that began in 2022 has made private equity less profitable and reduced the amount of money firms return to their investors. Often, investors have no better option than to be patient and wait for a sale. But that leaves the question of fees, and how to best incentivize managers to sell and wind the fund down. More and more investors "are scrutinizing the fee model" of these late-stage funds, said Runjhun Kudaisya, a partner in the private-funds group at law firm Goodwin. With average fund life—which used to be 10 to 12 years—now stretching toward 15 years, "there has been a shift in the market" and fund backers increasingly try to negotiate late-stage fees at the time of investment, Kudaisya said. Read the Wall Street Journal article for more.