Private equity faces 'crisis of value' over inflated prices
BNN Bloomberg
Private owners of assets face a “crisis of value”, after years of prices being driven higher by rock-bottom interest rates, according to two senior private equity figures.
“Right now in the private markets it has been a crisis of value,” Gabriel Caillaux, head of General Atlantic’s business in EMEA, said in a Bloomberg TV interview at the SuperReturn conference for investors in Berlin. “The excesses happened because valuations ran up and you had a whole new set of actors that came in who made the deal cycle a little bit too accelerated.”
Some deals have been mis-priced because of the sustained period of low interest rates, particularly in health and technology, Scott Kleinman, co-president of Apollo Global Management Inc. said.
“When interest rates went to zero and stayed there for 14 years, it allowed for prices to go higher and higher in the public markets and the private markets,” Kleinmain said, also in a Bloomberg TV interview alongside the conference.
