Private Equity in Panic: Is This the Beginning of the End?
Billionaire Exposes the Grim Truth: Private Equity’s Glory Days Are OVER!
In a shocking revelation, Egyptian industrial tycoon Nassef Sawiris has declared that the private equity industry is teetering on the brink of disaster! Investors are left seething as they face a gut-wrenching reality—the inability to sell off a staggering TRILLION-DOLLAR asset portfolio!
Frustration Hits a Fever Pitch! Investors Demand Answers!
Sawiris, who has poured millions into various buyout firms, vented his fury over the dismal returns, saying, “They can’t exit. Exits are SO tough!” With no cash inflow for an agonizing five to six years, investors are taking matters into their own hands, pressuring firms like never before!
Continuation Funds: The Scam of the Century!
But wait, it gets juicier! Sawiris didn’t hold back on his scathing critique of the so-called “continuation funds,” describing them as nothing short of a colossal scam! These sneaky schemes allow private equity groups to recycle capital instead of selling to willing buyers, leaving investors fuming and feeling deceived!
Record-Breaking Resilience: OCI’s Bold Moves Amid Chaos!
Meanwhile, while the private equity world crumbles, Sawiris’s own empire, OCI, is thriving! With a series of major deals that netted a jaw-dropping $11.6 billion, the company is cashing in while others are drowning. OCI’s strategic sell-offs, including its lucrative methanol business and a Texas low-carbon ammonia project, are turning heads and filling shareholders’ pockets with eye-popping payouts!
The Market Mayhem: Timing is Everything!
Sawiris revealed that OCI was incredibly “lucky with the timing” of these sales, expertly navigating a market riddled with uncertainty and falling gas prices! While private equity competitors flounder, OCI is raking in cash and eyeing new acquisition opportunities!
No Attractive Targets: Private Equity’s Bleak Landscape!
In a jaw-dropping twist, Sawiris candidly admitted that after examining dozens of potential acquirees—many of them high-leverage, desperate private equity-owned firms—NOT A SINGLE ONE made the cut! “Why are we here to solve somebody else’s problem?” he exclaimed, shining a spotlight on the struggles plaguing his competitors.
Critique of Management: A Troubling Focus on Fundraising!
It gets even better! Sawiris pulled no punches when he blasted private equity managers, claiming they’re SOAKED in fundraising efforts at the expense of their companies’ success. “They spend 90% of their time fundraising!” he fumed. No wonder they can’t manage their portfolios!
The Decline is REAL: Assets Under Management Fall for the FIRST Time!
In an unprecedented turn of events, asset management in the private equity landscape has shrunk for the FIRST TIME since 2005! With total assets slipping to $4.7 trillion by June 2024, the industry’s once booming growth is fizzling out amid gnawing market volatility!
The New Kings of the Castle: Only the Biggest Will Survive!
As the chaos continues to unfold, only the titans of the industry, like Blackstone, stand poised for survival. “The only guys that have a future are the guys competing with JPMorgan and Bank of America,” Sawiris asserted, signaling a dramatic shift in the financial ecosystem!
Buckle up, folks! The private equity rollercoaster has taken a terrifying plunge, and it’s only just begun! Will anyone manage to right this ship, or is the industry destined for irrelevance? Stay tuned!
photo credit: www.ft.com
