Higher interest rates and lower consumer spending are squeezing debt-laden companies backed by private equity groups, forcing them to either restructure through bankruptcy or buy time to recover via out-of-court settlements with creditors.

The stress on private equity-backed companies shows up starkest in a recent study by S&P Global Market Intelligence, which shows that a record number of 110 private equity and venture capital-backed companies filed for bankruptcy in 2024.

These failures, concentrated in the consumer and healthcare sectors, show how even as the US unemployment rate remains low and the S&P 500 ploughs ever higher, certain corners of corporate America are hurting, with many companies struggling to survive under the pressure of high interest rates, lower consumer spending and crippling stacks of debt.