The IPO drought is driving private equity-owned companies to the debt market to pay investors

Private equity funds are increasingly pushing their portfolio companies to take on more debt to return cash to their investors, data suggests.

It comes as the typical ways of monetizing private equity investments — selling company stakes via IPOs, or offloading them to other PE funds or buyers — have dried up in recent years. READ MORE

How Private Debt Went from Niche to a $2 Trillion Industry

Private debt began as a niche financing approach, but has ballooned into a $2 trillion industry over the past 15 years, funding everything from local home-repair shops to AI data centers.

Regulators and investors are taking note. Earlier this year, private debt evergreen funds that give retail investors a flexible way to back private companies made headlines for limiting withdrawals. And the Federal Reserve has cited increased pressure on the industry’s private credit segment as a risk that could “result in a tightening of credit conditions that could spill over into broader credit markets.” READ MORE