Is there a threat to the market?

Core Insights - The discussion highlights skepticism regarding the returns claimed by private equity and private credit, suggesting that the perceived advantages may not hold up under scrutiny [1][2][3] Private Equity and Private Credit Performance - Private equity claims a cumulative return of 113% over the last five years, while their levered equivalents have declined by 6%, raising questions about the sustainability of these returns [5][6] - There is a growing concern that private equity and credit firms may not be able to generate the expected returns in a higher interest rate environment, which could impact their overall performance [3][6] Impact on Investors - Large endowments, such as Harvard and Yale, that have heavily invested in private assets are experiencing deteriorating cash and liquidity due to declining payouts, indicating that actual returns may be much lower than reported [6] - The average American and small businesses are likely to be the first to feel the negative effects of potential issues within private credit markets [7][8] Regulatory Concerns - There is a significant amount of lobbying activity aimed at promoting private equity for retail investment vehicles like 401(k)s, raising concerns about the protection of less sophisticated investors [10][11] - The current regulatory environment may not adequately safeguard individual investors from the risks associated with private equity and credit investments [10][11]