Private Equity's Big Guns Are Tearing Up the Rules on Leverage
A flurry of recent buyouts has seen PE firms paying most of the purchase price, a long way from the industry’s heyday when debt was by far the biggest element.
The Thoma Bravo private equity firm at 830 Brickell Plaza in Miami, Florida, US.
Photographer: Scott McIntyre/BloombergAs one of the world’s largest sovereign wealth funds warned this week that private equity is “very troubled” right now, a spate of recent buyout deals in Europe and the US points to a possible route out of the mire: The deep shift in how much debt this industry uses to fund its takeovers.
KKR & Co. has been busily dealmaking despite the gloom around President Donald Trump’s tariff upheavals, snapping up a couple of Swedish health specialists in the process. Fellow private equity firm Thoma Bravo, meanwhile, has pulled together one of the year’s biggest buyouts with the $10.6 billion purchase of Boeing Co.’s Jeppesen navigation unit and other assets.