Part 16/17:
The Reality Check: An Industry in Transition
In conclusion, the narrative of private equity offering stability, diversification, and alpha is increasingly being challenged. The core drivers of returns—leverage and financial engineering—are becoming less reliable as market conditions tighten. Many of the supposed operational improvements are either overstated or short-lived, and the valuation and measurement practices can obscure underlying risks.
As private equity firms pivot toward retail investors through new 401(k) inclusion, the sector grapples with fundamental questions about transparency, performance, and social impact. IS the promise of "democratized" access to private markets justified, or does it merely serve as a new avenue for extraction and fee collection?