Here comes a barely coherent rant:
I just don't see how the industry can generate the returns necessary to continue to charge high fees and raise increasing amounts of capital when you're doing dealswith 7x of debt with companies that have already gone through 3 buyout cycles. MM PE especially (call it $50-200MM checks) seems especially saturated at this point as every deal that isn't a total dog is priced to perfection in an auction process with 100+ prospective buyers. "Operational focus" is table stakes at this point and every reputable firm has some former GE six sigma black belt boomer that can "lean" out processes. Proprietary sourcing doesn't exist for any companies with decent scale worth buying. Distressed / turnaround is a) overcrowded; and b) like trying to catch a falling knife.
And despite all this you have mediocre funds raising BILLIONS of dollars in this environment. I wouldn't be surprised if top quartilefor 2016-2020 vintage funds is like 10%, which is absolute dogshit when you consider leverage and illiquidity but I guess you can't expect any better when it's the the same portcos at increasingly inflated valuations. Is there any hope left in the industry? Any reason there won't be a major shake out in 10 years? The only thing I can think of is LPs continuing to flood the space with money and just accepting shitty returns because there's literally nowhere else for them to park their cash while attempting to make good on their bloated pension obligations. I guess the smarter ones have already come to that realization considering Calpers is planning to LEVERAGE THEIR WHOLE GODDAMN fund.