PEs and AIs and Bears. Oh My!
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Not long ago, Private Equity was hailed as another great new financial innovation – Mo money, Mo money, Mo money! In the last couple years, there's been a rising number of stories questioning their value. I suppose times like this it's a lot better they call themselves Private Equity and not Private Debt.
The FT writes, Private equity fundraising slides as sector’s downturn deepens. Best,
“After three years with a lack of liquidity, the rule book for fundraising has been fundamentally rewritten,” said Richard von Gusovius, global co-head of distribution at the private capital advisory Campbell Lutyens. “The investors really want their money back.”
Funny, funny stuff, imagine investors wanting their money back. Then another about how the industry thought Trump II would turn fortune up,
“That acceleration hasn't materialised the way we had expected,” said Gabrielle Joseph, a managing director at Rede Partners, a private equity fundraising advisory firm.
"The acceleration hasn't materialised," I should write for these guys.
In many ways, PE's fortunes are directly tied to AI. Again the FT, Tech stocks are sending a warning, this time about AI. Best,
"OpenAI discovered this when its GPT-5 AI model failed to dazzle the crowd earlier this month. Just as the excitement starts waning, OpenAI’s Sam Altman said at a recent event that the hype has elements of a bubble."
Ya think? A guy who has been going around the last couple years claiming he's creating a new godhead thinks there might be elements of a bubble – bubblehead anyway. The FT writes of the AI-PE connection,
"Huge consumers of AI technology like Amazon and Alphabet will fund only around half of the almost $3tn (yes, trillion) likely to be spent on AI infrastructure over the next three years. The bulk of the rest will come from private equity, private debt and venture capital."
Speaking of AI infrastructure and the number of plants needed for supposed electricity generation, if I was betting man, I'd take the way under on how many will get built. Here's a great little local news item from Louisiana. Take particular notice of the men of the Louisiana Public Service Commission (PSC), hands on hearts, approving three new gas plants to fire one of Facebook's new data centers.
The best is how the newswomen read, straight-off the press release, this will provide jobs, when every knucklehead in Tech is talking about AI being a job destroyer. And they repeat Entergy's claim this will cost rate-payers nada, if only I had a dollar for every time a utility said that. Anyway, I thought taking advantage of yokels was PC incorrect in the MAGA era?
Entergy is one of the new electricity conglomerates formed over the last three decades cutting across state-lines. Utility commissions like the PSC are century old state regulatory bodies that arose out the railroad era to check and balance corporate power. They're not even archaic at this point, not one, anywhere in the country is a check or balance on corporate power.
Money, energy, information, and corporate power, the politics of the 21st century for which we have no democratic politics. The Greeks called it oligarchy. However, there remain institutional remnants of local power across the nation, reviving, reforming, and networking them to stop these plants and idiocy would be a way to begin restoring democracy in America.
And Bears.
Oh My!
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