|
| andrewjl wrote:
| How much of this will end being a ZIRP phenomenon? The article
| does cover the implications of rising interest rates towards the
| end.
|
| > Meanwhile, interest rates have reached a 20-year high, posing a
| direct threat to private equity's debt-heavy business model. In
| response, many private-equity funds have migrated toward even
| riskier forms of backroom financing. Many of these involve taking
| on even more debt on the assumption that market conditions will
| soon improve enough to restore profitability. If that doesn't
| happen--and many of these big deals fail--the implications could
| be massive.
|
| For anyone interested in the nuts and bolts of how private equity
| works I highly recommend the 50X podcast[1] which covers how a
| firm focusing on buying out aircraft component suppliers
| operates.
|
| [1] https://www.50xpodcast.com
| ramesh31 wrote:
| >How much of this will end being a ZIRP phenomenon?
|
| A lot, given that private equity operates on a debt driven M&A
| strategy. But don't expect the consolidation to slow down. They
| will just squeeze their businesses and customers that much
| harder.
___________________________________________________________________
(page generated 2023-11-04 23:00 UTC) |