People are making money in the vast majority of private equity investments that we have seen. There is an occasional fund or investment that that ends badly, and these are the ones that are widely discussed and/or covered in the news.
It is very rare, but a fund manager could have a business model that makes no or minimal profits, instead providing investors with “returns” by falsifying statements and/or distributing “returns” from the capital provided by other investors. This is difficult or impossible to do with third-party administration and audited financials, which are in place with this fund. This fund also makes a substantial profit each month in the form of interest income.
Equity funds that borrow against their assets, and therefore place that debt ahead of their investors in the capital stack, expose their investors to some risk. If the asset values drop or do not increase as planned, the debt can get paid back first, leaving investors with little or nothing. In contrast, this is a debt fund that does not owe any debt but instead owns it.
Many people have lost most or all of their investment simply by investing in something that was high risk. An example would be investing in startups.