Private Equity Boom Faces Reality Check as Returns Falter Post-2019
Higher rates and peak-era valuations leave buyout funds struggling to exit, reversing decades-long outperformance and forcing focus on operational improvements amid a 33,000-company backlog.
Editorial companion
What stands out
Steven Kaplan of the University of Chicago Booth told Bloomberg that the private equity (PE) playbook built on cheap debt and multiple expansion is starting to unravel. Higher interest rates and deals struck at the 2020, 2021 peaks have made leveraged buyouts harder to justify and exits harder to execute, while PitchBook reports a backlog of more than 33,000 companies sitting in PE hands. Entrepreneurs like Dan Namerow are a reminder that life-changing exits are not guaranteed, and limited partners are finally asking whether managers can actually improve businesses.