Harry Stendhal’s Post

🚨 Private equity is now a risky game for investors! 🚨 With the end of ultra-loose monetary policy, private market assets have ballooned to $13.1tn despite higher financing costs and weaker balance sheets. Institutional investors are increasing exposure, but returns are down, and governance issues are more pressing than ever. SEC transparency rules were overturned, adding to the risks. While private markets offer diversification and growth in infrastructure and tech, costs and illiquidity remain concerns. 📉📊 Stay vigilant and informed! #PrivateEquity #Investing #RiskManagement

🚨 Private equity is now a risky game for investors! 🚨 With the end of ultra-loose monetary policy, private market assets have ballooned to $13.1tn despite higher financing costs and weaker balance sheets. Institutional investors are increasing exposure, but returns are down, and governance issues are more pressing than ever. SEC transparency rules were overturned, adding to the risks. While private markets offer diversification and growth in infrastructure and tech, costs and illiquidity remain concerns. 📉📊 Stay vigilant and informed! #PrivateEquity #Investing #RiskManagement

" You never know who is swimming naked until the tide goes out." Warren Buffett "Governance shortcomings in private equity, overlooked in the cheap money bonanza, now look pressing as institutional investors query the values private equity managers put on portfolio companies. The valuation issue has been acute since the return of more normal interest rates. Private equity managers have tended to write down their assets’ value by far less than the falls in public markets. This is a nonsense given the higher leverage and illiquidity of the asset category. The writedowns should be far greater than for public equity." #Privateequity #PE #Privatemarkets #Alternativeassets https://lnkd.in/eyMzjGcK

Highlighting this excerpt from the FT article below, which begs the question, "If Private Equity will look different over the next 10 years than it looked over the past 10 years [absent "falling interest rates" and "a low cost of capital"], is not the same true of Public Equity? ***Begin Excerpt*** Private equity can no longer rely on borrowing cheap money to fuel returns, and will have to go back to its roots of sourcing good deals and making operational improvements, according to the head of Goldman Sachs’s investment business.  “Private equity will look different over the next 10 years than it looked over the past 10 years,” said Marc Nachmann, global head of asset and wealth management at the US bank, in an interview. “It will be a little bit back to the future in a sense.” The decade and a half of low interest rates that followed the 2008-2009 financial crisis heralded a boom in private equity, as managers made use of cheap and plentiful debt to embark on acquisition sprees. Falling interest rates raised asset values and cut the cost of capital. “Over the past 10 years you could rely on lots of leverage, cheap cost of capital and multiple expansion, and you made your returns that way,” said Nachmann. “That will be harder to do going forward.”  ***End Excerpt***

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.

In 2023, the #PrivateEquity sector faced ongoing challenges as surging interest rates resulted in sharp declines in dealmaking, exits, and fund-raising. Delve into our annual report to learn more about the outlook for the year ahead.