Unhedged Private equity’s public reckoning
12 snips
Sep 16, 2025 
Antoine Gara, the US private equity editor at the FT, delves into the challenges facing private equity in a high-interest rate environment. He highlights how firms are innovating to secure funding without closing shop, but warns that the clock is ticking. The discussion also covers the complexities of valuations and the growing delay in IPOs, alongside the risks of introducing retail investors to private equity. They humorously contrast celebrity fashion choices while dissecting the stability of advisory firms in this volatile market.
AI Snips
Chapters
Transcript
Episode notes
How Private Equity Funds Work
- Private equity funds pool capital, buy multiple companies, and run on a 10–12 year lifecycle with concentrated exit expectations.
- Returns target 2–3x over the fund life but are bounded by the fund's time structure and exit mechanics.
Returns Are Leveraged And Sometimes Engineered
- Leverage and operational changes drive much of private equity's headline returns, sometimes amplified by timing tricks like subscription lines.
- Those mechanics can make annualized returns look much higher than cash actually put in and returned.
David Lloyd Gyms Sold Into A Continuation Fund
- Katie uses the example of David Lloyd gyms sold from one part of TDR to another via a continuation vehicle.
- Antoine describes the marketing pitch and the skepticism about who sets valuations and who benefits.