Trump wants your 401(k) in private equity — but 54% of the biggest 2025 bankruptcies were PE-backed companies

Data from PitchBook showed just how much this sector is struggling, with private equity firms currently clinging to 13,500 unsold companies, thousands of which The Wall Street Journal estimates have been in portfolios for six to nine years.

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In a persistently high-interest-rate environment, more market observers fear the worst for these debt-saddled businesses. Matt Parr, communications director at the nonprofit Private Equity Stakeholder Project (PESP) , explained to Moneywise that "Large private equity-driven debt loads can leave companies more vulnerable to financial distress, closures, and layoffs."

Findings in PESP's Private Equity Bankruptcy Tracker revealed just how much of a mess this sector is currently in. Of the biggest U.S. bankruptcy filings in 2025 (all with at least $1 billion in liabilities), 54% were private equity companies. Private equity firms were also in 51% of U.S. corporate bankruptcies with liabilities over $500 million.

In total, PESP noted that private equity firms took up 10% of 2025's corporate bankruptcies, even though they only make up about 7% of the U.S. economy.

Despite these alarming figures, President Trump is pushing for more access to private equity in retirement portfolios. In 2025, the White House issued Executive Order 14330 , which focused on broadening the range of allowable investments in 401(k)s.