Buyout firms have been urged to realise investments and return capital to investors to avoid reputational damage, as figures show there are about 1,200 so-called zombie funds sitting on $116bn worth of assets globally.

Data provider Preqin said in its monthly report on private equity industry trends, published yesterday, that the huge value of trapped investments spans 1,732 portfolio companies currently held by zombie funds - vehicles that are sitting on investments overdue for sale with no plans to exit or raise a successor fund. Meanwhile, the buyout firm continues to charge management fees to investors.