Private Equity Flourishing or diminishing?

August 24, 2025

by a searcher from Hult International Business School in Cambridge, MA, USA

I'm encountering contradictory news. On one hand, 401(k) is about to accept PE investment. On the other hand, it alleges that the return and new funds of PE are decreasing. What's your view?

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Reply by an investor
from Drexel University in Philadelphia, PA, USA

PE isn’t booming or dying, it’s changing. The old playbook (cheap debt + rising market multiples) is done. With higher rates and rich valuations, that approach just doesn’t work. Most scary headlines are really about firms that didn’t pivot. What works now is real value creation. The firms winning are the ones that: -Fix how companies actually run. beyond basic cost cuts. -Push real digital and tech upgrades across the portfolio. -Use AI to remove bottlenecks and open up new growth. Soon, the spreadsheet-only crowd will fade. The groups that act like true operating partners building better, smarter companies from the inside out will keep delivering strong returns (which is why big pools like 401(k)s still care)

Reply by an intermediary
from The University of Chicago in Chicago, IL, USA

I agree with ^redacted‌ and ^redacted‌. If PE dies, most of the pension plans of large corporations, education and government institutions, etc. will be under-funded. If PE dies, entrepreneurship will suffer. PE has pivoted many times.

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