Investors in Australian private equity funds face a cumulative $25 billion wipeout as valuations for portfolio businesses can no longer escape the effect of higher interest rates, shrunken profit margins and reduced prices for benchmark assets.
New research by global consulting firm Alvarez & Marsal concluded that a near tripling in capital deployed, from $22 billion in 2020 to $146 billion in 2022, will mean some losing bets.
Source: https://www.afr.com/wealth/investing/private-equity-funds-face-25b-valuation-wipeout-20250130-p5l89e