Private equity is about to look a lot different

It’s time to face the facts. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Read in browser

This is the Weekend Edition of Bloomberg Opinion Today, a roundup of the most popular stories Bloomberg Opinion publishes each week based on web readership. New subscribers can sign up here; follow us on Bluesky, TikTok, Instagram, LinkedIn and Threads. Before we begin, a brief detour: We’re inviting subscribers to join Bloomberg Opinion columnists and editors at our New York City headquarters for a live look at the political, economic and market forces shaping America. Sign up here to attend. The End of Private Equity’s Leveraged Buyout Era Is Nigh — Paul J. Davies Higher-for-longer interest rates are forcing buyout firms to face facts. Struggling since 2023 to sell companies purchased in the long decade of ultra-cheap debt before the Covid-19 pandemic, they’ve tried to placate investors with clever financial engineering to help keep some money turning over. But after several false dawns for a return to low rates, the classic private equity leveraged deals industry is moving into the final stage of grief over its prospects: acceptance. Executives in the sector are beginning to admit openly that returns will fall short of what was promised for a lot of existing funds, and especially those that did most of their deals between 2017 and 2021. Investment lifespans are extending well beyond the three to five years that used to be the norm. In the US alone, $860 billion, or more than 40% of total buyout assets, is tied up in companies that have been owned for more than seven years, according to Pitchbook, a data company. Industry leaders need to do something. With leveraged deals gummed up, new fundraising has been hurt for the past couple of years. It’s a pain for the industry’s rainmakers, too. Poor capital returns mean they’re not getting paid the fat bonuses they expected, driving some managers to quit the sector in search of more fulfilling and enriching work elsewhere. Read more Allison Schrager The ‘Intangible Economy’ Is Making Everyone Miserable Javier Blas Why Is Oil at $100 If Trump Is Winning the Battle in Hormuz? Marc Champion I Read Iran’s 14,390-Word Letter to Americans So You Don’t Have To Hal Brands Trump’s UN Bluster Didn’t Impress Xi, Putin or Iran Jonathan Levin Warsh’s Credibility Boost Is Bessent’s Comeuppance Liam Denning Trump’s $54 Billion Election Pitch for Alaska LNG Is Its Undoing Bloomberg Opinion’s Weekly Video Roundup From Myanmar to Afghanistan, authoritarian regimes are being welcomed back into international politics without making meaningful concessions. But engagement without conditions risks legitimizing their rule, Ruth Pollard warns. Millions of homeowners are locked in to 3% or 4% mortgage rates. Justin Fox explains how that’s reducing the supply of homes for sale and making it harder for buyers. Amazon is equipping its delivery drivers with smart glasses that capture images of their surroundings. It raises questions about privacy, data use and the future of delivery work, says Dave Lee. If you’re a fan of Bloomberg News’ Pointed quiz, check out Alphadots, a daily word puzzle with a plot twist. Today's clue is: Fertility treatment? Alphadots|Bloomberg Games Play We’re improving your newsletter experience and we’d love your feedback. If something looks off, help us fine-tune your experience by reporting it here. Follow Us You received this message because you are subscribed to Bloomberg’s Opinion Today newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue New York, NY 10022 |