2024-04-27 06:00:00 ET
Summary
- The 2022-23 normalization of interest rates began to illuminate the darkness in private debt and equity products.
- Funds in the space have been devising ways to extend and pretend, paper over losses, and avoid mark-to-market pricing.
- The strong growth and attractive returns of the private equity asset class over the last ten years has occurred during a period of low interest rates.
I've frequently spoken and written about leverage-on-leverage contagion risks from the private equity and credit markets, with feedback loops to real estate. Some of the articles are here . As interest rates slumped in the decade leading up to 2022, this space increasingly attracted yield-starved capital from institutions and individuals alike....
Read the full article on Seeking Alpha
For further details see:
Private Equity More Boondoggle Than Brilliance