PODCAST: LPs rethink role of private equity in era of higher rates

In this second episode of our miniseries, Private Markets and the End of Cheap Money, we talk to LPs about allocation shifts, impacts on fundraising and what investors are looking for out of their GPs as rates rise.

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Central banks around the world have been raising interest rates to combat inflation, making borrowing more expensive for everyone. That includes private equity firms, which for years have enjoyed historically low borrowing costs to finance leveraged buyouts. So how are private equity firms coping with the end of cheap money? To find out, reporters and editors across several PEI Group titles have spent the last few months speaking to dozens of industry participants to get their perspectives.

In this second installment of our five-part podcast miniseries, Private Markets and the End of Cheap Money, we look at how higher interest rates are impacting limited partners and their ability to provide private equity funds with fundraising capital, the lifeblood of the industry.

Chris Witkowsky, editor of Buyouts, spoke with LPs and consultants about how institutional investors are approaching the higher-rate environment, including by potentially shifting asset allocations. Significantly, LPs discuss what they are looking for in GPs amid the new environment.

Featured in this episode: Andrea Auerbach, global head of private equity at Cambridge Associates; Jim Pittman, executive vice-president and global head, private equity, at British Columbia Investment Management Corporation; Craig Ferguson, managing director, private equity, with Investment Management Corporation of Ontario; and Drew Schardt, head of global investment strategy, co-head of investments and co-head of direct credit at Hamilton Lane.

Listen to the first episode in the series here.