Unfortunately for investors in private equity, private equity firms…

Unfortunately for investors in private equity, private equity firms essentially stop deploying capital when high-yield spreads rise above 6.5% which is also the time when returns in private equity are the best. High-yield spreads had a -69% correlation with quarterly private equity deal volume from 2006-2018.

— from The Flight Plan (Purpose/Wisdom/Risk) · Humble Investor: How to Find a Winning Edge in a Surprising World by Daniel Rasmussen

Also belongs to

• Time
• Decisions & Choices (Decision/Choice/Focus/Forethought/Consequences)
• Leadership & Business (Leadership/Business)

Related

• THE FLYWHEEL OF SUCCESS If you are investing in…
• I obsess over not losing money
• The spread is a real-time indicator of investment flows…
• THE FLYWHEEL OF SUCCESS If you are investing in…
• To carry one’s eggs and a great number of…
• Cycles can have a major impact on the growth…