• Zombie funds are on the rise as private equity dealmaking and distributions slow.
• We asked recruiters about the reputational impact of working at a zombie fund.
• They suggested looking for an exit, especially if you're an investor or fundraiser.

Have you heard the news? A new contagion is turning formerly healthy private equity firms into the walking dead. It's not fungal, like in "The Last of Us," a virus, like in "28 Days Later," nor a magical reanimation like the original Haitian Vodou Zombis.

Instead, it's the result of a dealmaking slump, pickier investors, and macroeconomic conditions that have turned some private-equity firms into glorified estate sales, auctioning off their dusty holdings before closing up shop.

There are many definitions of a zombie fund — but no matter how you slice it, it can be bad for your career.

To some, a zombie fund is one that's passed its investment deadline, but is still holding onto capital to invest. Others say it's a firm that can't raise new money and is stuck managing and selling off its current portfolio. Zombie fund can also refer to a fund that has invested capital but is delaying the process of returning money to investors while it continues to collect management fees.

The phrase has picked up steam amid a multiyear lag in M&A and IPOs that has slowed private equity dealmaking and distributions to investors.

Private markets data firm PitchBook said the number of US funds that haven't made an investment in a year, despite raising money in the last six years, is up 50% from 2021 to June 2025, to 651. Internationally, they're up 40% in the same period to 1203.

We spoke to recruiters about the rise of the zombie funds and what that means for people working for them. Here is what they said.

When to run

Recruiters said employees, especially in certain roles, should start job-hunting at the first sign of zombification, though they warned that not every slowdown signals trouble.

"If they are working at a firm that has no plans to fundraise for the foreseeable future, that is usually their sign to go straight to exploring the market," Jessica Xu, head of investor relations recruiting at Selby Jennings, told Business Insider.

This is especially true for people in fundraising roles, where success means growing the firm's assets under management and building strong and deep relationships with investors.

Bill Matthews, partner at BraddockMatthewsBarrett, said it's also true for people in investment roles because a zombie fund will drag down your investment track record.

"Folks have to pick their head up and move," he said, adding, "On the investment side, you want to have a track record of doing deals and exiting deals, and if there's a zombie fund, that's not going to be the case."

Of course, fundraising has slowed across the board and isn't necessarily a death knell. It's important to differentiate between a slowdown due to market conditions and one caused by dissatisfied investors. Just make sure you're keeping busy during the slowdown, said Lisa Steele, a partner at BraddockMatthewsBarrett.

"You're maintaining relationships and keeping current LPs up to date, which is also critically important to these long-term partnerships," she said, referring to limited partners, the industry's catchphrase for fund investors.

You should also be developing new relationships, which Steele said will prove "hugely valuable when you go back to market."

How to interview

A candidate running from a zombie fund may feel tempted to hide their current situation in a bid to make the candidacy more enticing. That would be a mistake, recruiters said.

Matthews said hiring firms tend to know which of their peers are zombie funds from conversations with investors and other intermediaries.

"It's important for candidates to be as transparent as possible with potential employers about their reasons for wanting to leave their current firm, and working at a zombie fund is an understandable reason," Xu said.

The trick is to do it smartly. Recruiters warned against badmouthing the current employer or divulging confidential performance information. Focusing on personal gain is key, they said.

"Many candidates in these situations feel constrained in their ability to drive growth and create meaningful value for their investors," said Xu, adding that they are "seeking environments where they can contribute more strategically."

By focusing on how you'd benefit from moving to a better-performing fund, you come across as a good player on a bad team. And it's worth remembering that there are worse situations to be in.

"A hiring firm's biggest fear is unknowingly hiring another firm's castoff," Matthews said. "A zombie fund situation is obviously a good and valid reason why someone would want to leave."

• Tech is hiring again, but the roles and skills in demand look different this time around.
• Atli Thorkelsson, head of network at Redpoint Ventures, put together a slide deck on hiring trends.
• The top of the market is "the most competitive it's been in years," Thorkelsson said.

The tech industry is now split between two starkly different job markets.

On one side, there's a stalled job market where more workers are staying put. On the other there is a rapidly expanding artificial intelligence sector that's reshaping the talent landscape.

To help founders understand the situation, Atli Thorkelsson, head of talent network at Redpoint Ventures, created a slide deck on the state of tech hiring. He presented it at the firm's third annual InfraRed Summit, which brings together founders of up-and-coming companies in cloud infrastructure.

The deck includes data cobbled together from Pave, a compensation management tool; TrueUp, a tech jobs marketplace; and SignalFire, an early-stage venture capital firm.

Thorkelsson notes that the charts throughout the deck represent fast-growing tech firms. Since Redpoint used data from vendors that mainly serve tech clients with open roles, those companies end up overrepresented.

Here's an exclusive look at the 13-slide deck that Redpoint shared with founders.

Tech is hiring again, but the roles and skills in demand look different this time around.

The top of the market is "the most competitive it's been in years," Thorkelsson said.

Throkelsson said more employees are staying put in a tougher job market.

Retention is key. An analysis of pay data suggests companies are burning more equity and cash to keep people happy.

The companies that are hiring are hiring across the board.

The bulk of new hires have gone to AI companies.

Entry-level hiring is on the decline. An efficiency drive means leaner teams packed with battle-tested veterans.

AI companies tilt toward technical talent more than their peers at the same stage.

Premium talent is landing at AI firms, and with that comes premium paychecks.

Machine learning engineers are pulling in more cash and equity than their software engineering counterparts.

Red lines show individual contributors; white lines indicate managers.

Interviews are getting more AI-focused. Candidates are being asked about their AI skills far more often than a year ago.

In recent years, some HR teams toyed with shorter or front-loaded vesting schedules. Now, most are reverting to the standard linear vest, sticking with what candidates already understand, Thorkelsson said.

San Francisco still leads for AI jobs, but New York City is gaining ground as a tech hub.

• Education and healthcare roles drove unexpected job growth in June.
• But employment in state and local government education and healthcare masked weakness in other sectors.
• White-collar job seekers face challenges as professional services shed roles from May to June.

Sharpen your pencils and shine your stethoscopes: If you're looking for the drivers of the resilient labor market, they might be behind a desk at your local school or staffing your local hospital.

They were largely responsible for a June jobs report that came in hotter than expected, with the country adding 147,000 jobs — far outpacing the consensus forecast of 111,000 — and unemployment unexpectedly ticking down.

Payroll additions in state and local government education, as well as private healthcare and social services, masked weakness elsewhere. Those sectors alone added about 122,000 jobs in June. White-collar job seekers are facing a struggle, as roles feel increasingly scarce and hundreds of applications lead to dead ends.

"If you're not a teacher, if you're not a nurse, and you're not a doctor, you're not seeing those opportunities," Cory Stahle, an economist at the Indeed Hiring Lab, said. An industry breakdown of payrolls shows that professional and business services, a white-collar sector, shed roles from May to June.

The gains in education and healthcare might be in part because schools were more hesitant to let folks go this summer, perhaps due to ongoing teacher labor shortages.

"Probably what's going on here is that there were smaller-than-expected summer layoffs in the education sector, which could be about teachers or it could also be about support staff, like school bus drivers or custodial staff," Daniel Zhao, lead economist at Glassdoor, said.

If that is the case, Zhao said, "we might get an equivalently sized drop in the fall when schools reopen due to a smaller-than-expected hiring." He added that the new data is likely a seasonal quirk, rather than a sustainable increase in roles.

The private sector, which encompasses roles outside government employment, added 74,000 jobs in June, missing the expected 105,000. Within that, employment in the healthcare and social assistance sector increased by 58,600.

Stahle said that with healthcare, social assistance, and state and local government making up much of the job growth in June, "that's not necessarily reflective of a robust labor market that's benefiting everybody."

For workers who already have the qualifications for teaching and healthcare, which often require degrees or specialized training, June's numbers may be a good sign. But for everyone else, the job market is still looking murky.

"If you're already in the labor market, you're in pretty good shape," Stahle said. "But if you're out of it and you're looking for work, things are going to feel a lot different right now."

Are you a white-collar professional looking for work, or are you trying to get into education or healthcare? Contact these reporters to share your story at [email protected] and [email protected].