Self-Promotion Alert!

I’ve got a CNBC spot at 10:30am. The topic is whether or not private equity is about to become the next political piñata. Not just the carried interest tax issue, but also the current/coming wave of layoffs and bankruptcies at PE-backed companies.

I actually don’t think the layoff issue will hit private equity particularly hard, because it’s not as if publicly-held companies are doing any better in that regard. Ditto for overall performance. After all, if someone really going to argue that General Motors has been better managed than Chrysler?

Where I see some possible issues, however, are following the so-called bank stress tests. These analyses should uncover lots of securitized leveraged loans that are either underwater or effectively drowned. Only takes one degree of separation to link these back to buyout firms. On the flipside of that coin, of course, the cov-lite era means that fewer LBO-backed companies will actually fail. Particularly the larger ones that would make headlines…