You know Your Survival Guy’s concerns about private credit invading your retirement accounts. Don’t look now, but why are executives abandoning ship? Could it be that there isn’t much meat left on the bone when it comes to carried-interest fees?
Joseph Baratta, the longtime head of private equity at Blackstone and one of the firm’s most influential executives, is preparing to leave the investment giant after nearly three decades, according to the WSJ.
Baratta, who has overseen the growth of Blackstone’s private-equity business into a powerhouse that manages hundreds of billions of dollars in assets, is expected to depart near the end of the year. His exit follows several other recent departures by senior leaders. Baratta’s departure comes as succession plans at the world’s largest alternative asset manager increasingly center on President Jonathan Gray, who is expected to eventually succeed co-founder and CEO Stephen Schwarzman.
Here’s the part that caught my eye:
The private-equity industry is facing steep challenges. Firms are sitting on over 33,000 unsold companies, many of which were bought when interest rates were much lower. The backlog has made it harder to fundraise and has weighed on carried interest, a key form of pay tied to the performance of deals. Rising interest rates are now threatening to extend the logjam.
Action Line: Don’t be fooled by investment “opportunities,” especially when the big players are moving on. Want an alternative? Email me at ejsmith@yoursurvivalguy.com to discuss your options.
