BY SUSAN PULLIAM AND JEAN EAGLESHAM

Talbot Hall, a New Jersey facility that prepares prison inmates for release, drew an investment from a private-equity fund 16 years ago.

Today, the investment sits in a "zombie fund": a near-dead fund that ties up investors' money and continues charging them fees even as hopes of profiting from its remaining assets have faded.

It is a little-known horror show in the investment world. Of the roughly 10,000 private-equity funds raised over the past decade, at least 200 now qualify as zombie funds, accounting for as much as $100 billion of the $1.5 trillion currently invested in these vehicles, according ...