Leon Cooperman Warns Private Equity Is Risky Bet Fueled by Low Interest Rates
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.