Professor Glenn A. Okun
The Rabid Capitalist: The Big Point is a summary of a detailed note available to paid subscribers.
Last June, private equity executives attending SuperReturn Berlin admitted the obvious: private equity fund returns were declining. It was an extraordinary understatement since a dire warning was required. The recently released State Street Global Private Equity Index underperformed the S & P 500 across every typical time interval for the first time in twenty-five years. Private equity’s fortunes will continue to suffer, benefiting private credit and our business development company (“BDC”) portfolio (ARCC, CCAP, CSWC, FSK, MAIN, OBDC and OCSL). Funds hold over $3 trillion of portfolio companies, many of which were acquired in 2021 and 2022 at high valuation multiples fueled by low interest rates, that must be harvested.
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