All banks have got to be tightening access to credit despite the Fed’s bail out and despite the SNB’s bail out. What group does tightening credit hurt most? Private Equity firms.
- During the COVID trough we kept hearing how Private Equity firms would not feel the pain as they had access to approximately $1 Trillion in dry powder.
- Late last year and early this year a number of PE deals were funded with 100% equity.
- PE firms will feel this credit crunch which means lower M&A multiples across industries.
- Back in September we wrote that the Fed would pivot once the credit markets were disrupted. Fed Chair Powell comes from the Private Equity world. Let’s see how long before we have a full Fed pivot on the Fed Funds rate, QT, everything.