Asset Classes

Private Equity

Private Equity is any form of private equity that is not traded on public stock exchanges.

More About Private Equity

  • typically have lower volatility than private equity - due to infrequent and self-determined valuations (no daily price like public markets)

Examples of Public Equity
  • Investments in private startups
  • Investments in Private Equity Funds
  • Investments in non-public LLCs and partnerships

Massive Expansion After 2008 Financial Crisis

  • Private Equity assets grew 7x after the 2018 Financial Crisis (circa 2020)
  • Driven by desire for higher returns and lower volatility (thanks to infrequent asset valuations vs. public market real-time valuation)
  • Resulted in private equity firms being more competitive and paying higher prices
  • Debt levels have increased (higher EBITDA multiples) & loan covenants have decreased
  • Banks have limited loans (too risky with high ration).  Private debt markets have taken over