Today, the private markets have turned into a real marketplace.
You need to be extremely selective when choosing funds, managers, and strategies.
Not all opportunities are created equal far from it.
Private Equity: When rates rise, leverage breaks.
Between 2022 and 2024, central banks led one of the most aggressive tightening cycles in modern history.
👉 The Fed hiked rates 11 times from 0% to over 5%.
This reshaped the foundations of private equity, especially leveraged buyouts (LBOs) that thrive on cheap debt.
The outcome:
- Fewer exits and IPOs,
- Less cash flowing back to investors,
- And the rise of a new trend the dividend recapitalisation.
In short: fund managers re-lever their portfolio companies to pay out cash dividends.
It’s tempting in the short term but it weakens balance sheets and breaks the alignment between investors and the businesses they own.
History has already warned us:
KB Toys and Phones 4u both collapsed soon after big dividend recaps.
As rates begin to stabilise in 2025, the real challenge is clear:
👉 Back to real value creation operational growth, financial discipline, and transparency.
The next generation of private equity will be less about “financial engineering” and more about strategic transformation.
#Privateequity #expatrie #CEO #gestiondepatrimoine #finance
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