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

Private equity investments are struggling, with firms holding 13,500 unsold companies in their portfolios that have been there for six to nine years. The tax breaks in Trump's big bill expire after 2028, and market observers fear the worst for debt-saddled businesses. A nonprofit called Private Equity Stakeholder Project (PESP) found that 54% of the biggest U.S. bankruptcies in 2025 were private equity companies, with 51% of U.S. corporate bankruptcies with liabilities over $500 million involving private equity firms.

Private equity firms made up 10% of all 2025 corporate bankruptcies, despite only accounting for about 7% of the U.S. economy. President Trump is pushing for more access to private equity in retirement portfolios, including 401(k)s. However, experts warn about the risks associated with the private equity business model and the potential for higher fees eating into earnings.

Many Americans are not comfortable with private equity investments, with 65% of voters wanting stricter guardrails and 51% believing these firms make things more expensive.