Sticky bets can create dilemmas. Pensions and endowments can’t force private equity managers to sell. They can’t pull money from a fund without typically paying a price. Nor can they replace a manager unless there's evidence of wrongdoing. That means zombie funds can go on for years, sucking up pension managers' time and eroding returns.

Reports from 10 major public retirement systems show that they have a median 4% of their private equity portfolios locked up in funds older than 2009. Collectively, that’s $6.8 billion across more than 900 fund investments, some of which date back to the 1990s. Several funds were so troubled that they were delivering losses.

“Fund lives are going much, much longer,” Miller said. And with asset sales now more difficult, many managers face the same questions: “What, when and how are they going to exit?”

That’s an inconvenient counterpoint to private equity’s pitch that it can reliably take cash from teachers, police, firefighters and other civil servants and hand it back with significant returns a decade later.

Eoin Treacy's view

When valuations are high and global liquidity is tight, the big question is where does the epicentre of risk reside? Following the global financial crisis, many investors swore they would never again invest in illiquid structures. However, very low interest rates persisted and liquidity remained abundant, which suppressed yields. Those same investors were lured back into the private assets market because they had to capture yield.