After one big cheap money party, now a different time/Wage info flowing in from Japan/Other

After 15 years of one huge cheap money party, the economics of the private equity business is just not the same in terms of rates of returns and the flow of deals, both purchases and sales. If you didn't see, in yesterday's Financial Times there was an article titled "Buyout Groups Left With Record Unsold Assets as Deals Decline." The article said, "Private equity groups globally are sitting on a record 28,000 unsold companies worth more than $3T, as a slowdown in deal making creates a crunch for investors looking to sell assets. The numbers, revealed in consultancy firm Bain & Co's annual private equity report, show how rapidly the industry has grown, as well as the challenges it faces from higher interest rates that have increased financing costs."

And in the face of this and in the need/desire for liquidity, "This has prompted the industry to use alternative money raising tactics, including so called net asset value financing - loans secured against typically highly indebted portfolio companies - and transferring companies to new internal funds. This can allow in new investors while others exit."

Bottom line, private equity is just a levered long and now that the cost of capital is higher, and possibly for longer, their economics have changed as well.