Private equity is often portrayed as a blunt and ruthless strategy – an industry dominated by corporate raiders that slash costs, strip assets, and leave behind a trail of wreckage. This narrative poorly relates how private equity operates and what ultimately drives success in the asset class. Most private equity firms aim not to impair…

When private equity makes the news, its typically large buyout firms. They buy mega companies, so unsurprisingly make for better headline material. But bigger funds are just the tip of the iceberg. Below the surface is a scaled and matured middle market.  Purchasing dynamics favor the middle market (MM). Large US buyout funds (defined as…

Modern portfolios are largely shaped around public markets, which are influenced by public sentiment as much as underlying fundamentals. However, most US businesses are privately held and accessible only through private equity. The merits of PE as an asset class are manifold, including benefits beyond returns. This week we discover why private equity is an…

There are many faces of a leveraged buyout dollar. The private equity industry offers a robust landscape of strategies that provide a wide spectrum of risk-return profiles appealing to different investor requirements. Whether equity or credit-oriented, there are many options for investors to construct portfolios to meet their specific risk-and-return goals. As we covered in…

The notion of private equity as anything but constructive for shareholder value is of recent vintage. The real story of PE is the story of commerce itself. The first enterprising person to buy a company instead of starting one engaged in a private equity transaction. Before World War II, most “private equity” transactions were funded…

Private equity as an asset class delivers strong returns to investors, often better than public market benchmarks (see Chart of the Week). It also diversifies investor portfolios with access to smaller high-growth private companies. As PE becomes available to high-net-worth investors, understanding how these investments work is essential for a sophisticated wealth program.  While the…

Deal-making is poised to rebound, thanks to lower interest rates, a strong economy, and an overall favorable macro environment. So why does the media persist in predicting a gloomy outlook for private equity? There are certainly less optimistic data about the industry. Fundraising, for example, has slowed. According to PitchBook, PE firms raised $320 billion…

On December 3rd, the OCC and FDIC announced they were withdrawing the Leveraged Lending Guidance they (with the Fed) had instituted in 2013. This guidance had been an outgrowth of the GFC which created widespread devaluation of bank balance sheets globally.  Though the proximal cause of the downturn was poor sub-prime mortgage underwriting that spread…

With last Thursday’s Fed rate cut, the benchmark is down 200 bps from its peak in 2023. That’s the simple story behind so-called “spread compression” in private credit. While overall yields are down, middle market direct lending spreads are pretty stable.  What has shrunk are single-B spreads in the broadly syndicated loan (BSL) market. Those…

The surprise of 2025’s post-Liberation Day risk-on dynamic across markets has established a pattern we expect to continue well into next year. As we discussed last week, the implementation of rate cuts, the slowing of inflation and the persistence of economic growth has supported dealmakers and their financing partners.  Nevertheless, attention is focused on transactions…