Leon Cooperman Warns Private Equity Is Risky Bet Fueled by Low Interest Rates
Legendary hedge fund manager Leon Cooperman took a shot at the private equity industry, saying low interest rates that have fueled its returns won’t last.
“I think it’s a scam personally,” Cooperman said Wednesday at an event hosted by the New York Alternative Investment Roundtable.
Cooperman said declining rates are the main reason that leveraged buyouts have generated high exit multiples in the last decade. He said private equity deals have also benefited from a growing economy that may be losing its steam while competition for buyouts is on the rise.
“The odds are very high that interest rates will be going up over the next five to 10 years,” he said. The private equity industry has been in the midst of a fundraising boom while many hedge funds have struggled to raise capital because of lackluster returns.