Once Wall Street’s High Flyer, Private Equity Loses Its Luster

With interest rates rising over the last few years, and a regulatory environment that discouraged deal-making, the private equity industry was ready to ramp up in 2025. Despite hopeful outlooks on the year, only the latter part of the year was as productive as expected, with companies being reluctant to sell in fear of not receiving the returns they hoped for. This article from The New York Times explores the 

Booth's Steven Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and Kessenich E.P. Faculty Director at the Polsky Center for Entrepreneurship and Innovation, stated that the previous formula that any given private equity firm would follow worked for a long time. This article and Kaplan state, "the average fund raised by a private equity firm between 1993 and 2019 beat the stock market, often by a wide margin, every year, except during the global financial meltdown of 2008." 

However, rising interest rates in 2022 made deal-making more expensive, leading to companies getting "stuck". 

Read more about how firms are working around this coming into the new year in the full article at The New York Times website.