Is the private equity party over?
Julie Hyman gives the Yahoo Finance audience her latest hot take, which details the peaking of private equity dealmaking and the toll the breakneck pace to respond to deal opportunities had on investors in the market.
Video transcript
BRIAN SOZZI: Julie.
JULIE HYMAN: You know, I want to talk about another potential market indicator-- not necessarily an event but an indicator as we talk about whether we are past peak growth and what are going to be the implications of that?
We've talked a lot about the private money that has been sloshing around and then the implications for the public markets as those private companies come public. Bloomberg out with a story quoting Carlyle's cohead of European buyouts, Marco De Benedetti, who says we are peak in terms of deal activity, but he says speed is here to stay. Now, the story also talks about how worn out all those poor private-equity people are because they've been working so hard.
But I think I'm interested here in the implications for the rest of the private markets that have been so incredibly busy with a lot of cash really searching for a place to go. And as we know, part of that has taken the form of private-equity deals. A lot of it has also taken the form of venture capital. And then you get into SPACs and IPOs and some of the other cash outs that we have seen in this market that has been so rapid.
As we see the Fed start to pull back, as we see interest rates start to rise, as we see the economy potentially start to slow down or at least not grow at this same pace that we've seen during this torrid recovery, we could see some implications here for the so-called hot money, you know, that we have been watching so closely over the past year. Could you even see implications for things like meme stocks down the line? I guess that remains to be seen, but it's something that I'm definitely going to be watching.
