Private Equity’s Indigestion Hurts More and More
As moribund IPO and M&A markets defer asset realizations yet again, the challenge for buyout firms shifts further to value preservation.
How do you spell relief?
Photographer: Tom Kelley Archive/Getty Images
What can private equity firms do in this volatile market? Seemingly nothing. Even with a tariff reprieve, barriers to buying and selling assets remain. But buyout barons have their work cut out just operating the portfolio companies they’re sitting on. As investment realizations get pushed back yet again, the risk of business damage at their stuck-on-ice holdings increases.
The industry’s reversal of fortune has been stunning. Shares in the listed private equity firms were already weak. Last week’s shock US tariff announcement then sent Blackstone Inc. stock down nearly 20% before markets turned higher yesterday. EQT AB and Bridgepoint Group Ltd. were the two worst performers of the entire Stoxx Europe 600 index. CVC Capital Partners Plc dipped below the price of last year’s initial public offering — a deal that was priced to fly at the time.