
Jason Voorhees
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- May 15, 2020
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Back in the early 2000s, hardly anyone outside finance circles even knew what PE was, so firms could swoop in buy up undervalued companies, strip them for parts and flip them without much scrutiny. Remember Bain Capital's old plays or KKR's classic leveraged buyouts those were the wild west days. They operated with shaky regulation and little public scrutiny so they could quietly strike deals and rake in huge returns.
Fast forward to now markets are saturated interest rates are high and exit routes are drying up. Firms are resorting to shit liquidity strategies lik Inflexionβs Β£2.3 billion continution fund and risky NAV loans which are being flagged by the Bank of England and FCA for opacity and conflicts of interest.
Meanwhile, big names like Apollo, Blackstone KKR and Ares are underperforming the S&P 500 struggling to sell off past investments at good prices Exits have slowed, investor patience is gone and distribution droughts are intensifying
Gone are the days when PE chads were making huge profits workings in the shadows now regulators and lawmakers are behind their asses and are actively slapping massive fines on these firms. The SEC recently fined TZP Group for excessive, undisclosed fees even though the practice involved just around $509,000. PE canβt hide fee tricks anymore . KKR even backed out of a major Β£4 billion rescue deal for Thames Water spooked by political risks and regulatory pressure . And then thereβs Soho House a club that went public only to falter, then was taken private again in a cautious insider-heavy deal valued at ~$2.7 billion.
TLDR-
Those private Equity days are long behind us. All the money to be made is in hedge funds.
Fast forward to now markets are saturated interest rates are high and exit routes are drying up. Firms are resorting to shit liquidity strategies lik Inflexionβs Β£2.3 billion continution fund and risky NAV loans which are being flagged by the Bank of England and FCA for opacity and conflicts of interest.
Meanwhile, big names like Apollo, Blackstone KKR and Ares are underperforming the S&P 500 struggling to sell off past investments at good prices Exits have slowed, investor patience is gone and distribution droughts are intensifying
Gone are the days when PE chads were making huge profits workings in the shadows now regulators and lawmakers are behind their asses and are actively slapping massive fines on these firms. The SEC recently fined TZP Group for excessive, undisclosed fees even though the practice involved just around $509,000. PE canβt hide fee tricks anymore . KKR even backed out of a major Β£4 billion rescue deal for Thames Water spooked by political risks and regulatory pressure . And then thereβs Soho House a club that went public only to falter, then was taken private again in a cautious insider-heavy deal valued at ~$2.7 billion.
TLDR-
Those private Equity days are long behind us. All the money to be made is in hedge funds.