Is Private Equity Too Big to Fail?

Private Equity Experience

Welcome to another insightful episode of The Private Equity Experience podcast! In this episode, Emily Sander, Ed Barton, and Rory Liebhart dive into the controversial question: Is private equity too big to fail? As they discuss the parallels between the banking industry's "too big to fail" concept and private equity's massive influence, they explore the implications for investors, companies, and the broader economy.

Key Topics Covered:

• What does "too big to fail" mean for private equity?
• The role of private equity in the economy and employment.
• Historical precedents and lessons from past financial crises.
• Potential triggers for a private equity crisis.
• The intersection of politics, public perception, and private equity.
• Future outlook and actionable insights for investors and stakeholders.

Is Private Equity Too Big To Fail?

The discussion examines whether private equity firms have reached a stage where their failure could trigger a broader economic crisis, similar to the financial norms observed during the 2008 financial crisis.

Historical Context:

Exploration of historical events from the 2008 financial crisis to the recent banking troubles at SVB, providing context for our "too big to fail" discussion.

Interconnections and Stakeholders:

Conversation about private equity’s interconnection with pension funds, sovereign wealth funds, and the economy, shaping perceptions and potential government responses during crises.

Risk Management and Disruptions:

Analysis of how private equity navigated the 2008 financial crisis and COVID-19, focusing on liquidity and risk premium adjustments.

Potential PE Crises:

Discussion on what might trigger a private equity crisis, touching on the sensitivity to interest rate fluctuations and broader macroeconomic shocks.

Optical Challenges and Perception:

The hosts delve into the public and political perception of private equity, touching on its respective public image among sectors such as banking.

Highlights:

Economic Interconnections:

Discuss how private equity, including the PE-backed companies, can influence and be influenced by broader economic downturns.

Join Emily, Ed, and Rory as they delve into the nuances of private equity's resilience and its potential vulnerabilities, all while embracing the excitement of the upcoming football season!

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Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

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챕터

1. Witty Banter and Football Season Excitement (00:00:00)

2. NFL Preseason Predictions and Betting (00:03:11)

3. Private Equity: Too Big to Fail? (00:06:37)

4. Political and Economic Implications of Private Equity (00:11:03)

5. The Impact of Regulations on Banks and Private Equity (00:18:16)

6. Private Equity's Role in Financial Crises (00:19:07)

7. Potential Triggers for a Private Equity Crisis (00:22:51)

8. Football Talk: Seahawks vs. Raiders (00:34:50)