Private Equity's Playbook Loses Ground to Public Markets

Source Summary

Private equity's traditional advantage over public markets has reversed since 2019, according to University of Chicago Booth professor Steven Kaplan. Higher interest rates have made debt-financed buyouts harder to justify, while deals struck at peak valuations in 2020 and 2021 face exit challenges. PitchBook reports that private equity firms hold a backlog of more than 33,000 companies. Firms are now being evaluated more on operational improvements than on leverage and multiple expansion.