Public pensions and sovereign wealth funds are increasingly reducing the number of private-equity firms they park their cash with. It will cause a lot of pain over the next decade in the industry, as there are widespread expectations that numerous firms will have to shut down if they are unable to raise new funds. "They gave money to a lot of different managers without necessarily understanding what the performance was, or was likely to be." That is due in part to Blackstone's performance, which has outstripped that of most of its competitors. But not everyone can boast regular double-digit internal...