PE firms sitting on $1.5tn to be used for “market dislocation”
Private equity firms have been sitting on $1.5tn, ready to be used for “market dislocation” in industries such as travel which is particularly suffering.
The coronavirus has taken the place of a predicted recession, by impacting a range of industries on a global scale a little earlier than expected.
As the entire world suffers, private equity may be about to thrive.
PE giants – BlackRock. Carlyle and KKR have a collective $1.5tn available for failing industries according to reports.
The industries in their crosshairs include; travel, entertainment and energy industries.
Rising markets in the past few years have made it harder for PE firms to invest.
Instead they’ve been opportunistically stockpiling cash.
With coronavirus wreaking havoc, many high company valuations have collapsed, opening the door for PE firms to strike.
Many critics are claiming that this strategy makes money from the misfortune of others, especially considering the current circumstances.
“Vulture investors, especially in private equity, are waiting in the wings to scoop up scores of struggling businesses on the cheap,” tweet from Rohit Chopra, an FTC commissioner.
Governments however have been advising businesses to wait and ignore PE offers due to Federal aid, bridge loans and other safeguards that could assist during this time.
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