Private Equity Pours Billions Into Troubled Firms That Fail: S&P

Private equity firms are doubling down on pouring funds into struggling companies but only a handful of them see meaningful or lasting improvement in their credit quality, according to S&P Global Ratings.

The sponsors have injected more than $2.5 billion in total capital into at least 165 distressed portfolio companies in the middle market over the past five years, analysts including Denis Rudnev wrote in a Monday report. The research found the median sponsor contribution to be around $10 million, usually extending a company’s liquidity runway by seven months — a temporary relief — even though in some cases joint ...