PE Firms Flood Junk Debt Market to Pay Themselves

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• All the stars are aligned for dividend recaps; rates are coming down, spreads are tight, the market is open — yet the IPO market and M&A are still subdued. Investors want distributions, and dividend recaps can buy PE firms more time to wait for a better environment for exits.

  80% confidence

• At the current rate of fund distributions, it would take about nine years for customers to collect their money from the more than 12,000 companies held by US buyout funds

  80% confidence

• There were more than 18,000 private capital funds seeking $3.3 trillion in fundraising

  80% confidence

• The problem is the deals aren't performing. When they don't perform, even if I want to sell mine, I'm not going to sell it to the other PE guy that knows he has his own deals that aren't performing. The easiest thing to do is to do a recapitalization and sell it to a less credit discriminate investor, which is a CLO.

  80% confidence

• Bitcoin could reach as high as $200,000 by January's end

  80% confidence

• The reason that sponsors are doing dividend recaps is realistically because they have struggled to monetize their investments. The IPO market has started to thaw but is not really providing an exit. The LPs are not getting their money back.

  80% confidence

• The Darktrace dividend loan represents an aggressive financial policy with high leverage

  80% confidence