Private equity valuations are fundamentally mispriced
The bearish thesis argues that private equity asset valuations (marks) are fundamentally incorrect and face severe downward pressure, particularly in leveraged software and SaaS portfolios.
The argument
The speakers referenced comments from Apollo's John Zito suggesting that 'all the marks are wrong' in private equity. They argued that if the underlying private credit debt is showing signs of stress, the leveraged equity portion of these capital structures must be experiencing even more severe, unacknowledged write-downs.
The thesis, stress-tested
✓ What validates it
- ✓A sharp decline in fundraising volumes for major alternative asset managers in 2025-2026
- ✓Forced asset sales or restructurings at significantly lower valuations than previous marks
▸ Risks discussed
- ▸A soft landing or rate cuts could prevent a broader private credit panic
- ▸Public markets may continue to shrug off private market valuation discrepancies
Hear it yourself
"I feel like if I'm gonna bottom fish in one of these things in the equity of the the private credit companies themselves, Apollo's gotta be high on my list. Mine too. Yeah."
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