The notion of private equity as anything but constructive for shareholder value is of recent vintage. The real story of PE is the story of commerce itself. The first enterprising person to buy a company instead of starting one engaged in a private equity transaction. Before World War II, most “private equity” transactions were funded…

Private equity as an asset class delivers strong returns to investors, often better than public market benchmarks (see Chart of the Week). It also diversifies investor portfolios with access to smaller high-growth private companies. As PE becomes available to high-net-worth investors, understanding how these investments work is essential for a sophisticated wealth program.  While the…

Deal-making is poised to rebound, thanks to lower interest rates, a strong economy, and an overall favorable macro environment. So why does the media persist in predicting a gloomy outlook for private equity? There are certainly less optimistic data about the industry. Fundraising, for example, has slowed. According to PitchBook, PE firms raised $320 billion…

On December 3rd, the OCC and FDIC announced they were withdrawing the Leveraged Lending Guidance they (with the Fed) had instituted in 2013. This guidance had been an outgrowth of the GFC which created widespread devaluation of bank balance sheets globally.  Though the proximal cause of the downturn was poor sub-prime mortgage underwriting that spread…

With last Thursday’s Fed rate cut, the benchmark is down 200 bps from its peak in 2023. That’s the simple story behind so-called “spread compression” in private credit. While overall yields are down, middle market direct lending spreads are pretty stable.  What has shrunk are single-B spreads in the broadly syndicated loan (BSL) market. Those…

The surprise of 2025’s post-Liberation Day risk-on dynamic across markets has established a pattern we expect to continue well into next year. As we discussed last week, the implementation of rate cuts, the slowing of inflation and the persistence of economic growth has supported dealmakers and their financing partners.  Nevertheless, attention is focused on transactions…

A conversation this week between business TV anchors included the following half-joking observation: “Credit managers are saying, ‘Our 2026 outlook is baked. We’re now focusing on 2027.’” While we admire the brio behind this assertion, our confidence with market predictions – including our own – is not great. What many expected to happen this year,…

News reached us last week of an unfortunate Shillington, PA man wounded when his shotgun went off. Police believe his dog jumped on the bed where the man was cleaning the weapon, somehow triggering it. A neighborhood cat was also questioned but later released.  We bring this to readers’ attention because of the recent media…

In his 1985 best-selling “A Passion for Excellence,” Tom Peters tells the story of General Bill Creech, who led a reorganization of the US military’s airplane maintenance crews. His NCO’s process improvement plan involved assigning personnel to the same planes over extended periods of time, rather than switching them out more quickly.  When the general…

The Fed’s rate cut last week of 25 bps brings the funds benchmark down to 3.75-4.00%. That’s roughly 150 bps lower than its peak back in July 2023. Buried in this news were two interesting developments.  Chair Powell remarked that “there were strongly differing views on how to proceed in December.” Of the twelve FOMC…