Excess Returns · Friday, August 28, 2026
Dan Rasmussen, founder of Verdad Advisors, argues that private equity markets are experiencing a "train wreck" due to an over-reliance on consensus trades and inflated asset prices. He notes that a massive backlog of unsellable assets, acquired at peak multiples, is forcing firms into complex financing maneuvers to avoid liquidating at significant losses.
“and I think the whole thing has become a massive, uh, train wreck. Uh, and I think it was eminently predictable. Uh, although highly, highly non-consensus.”
“So, um, purchase prices in private equity, um, reached almost probably 20 times, uh, while public markets were trading at probably 15 in small caps at 12. Um, and now multiples have kind of come in from there.”
“as long as money was flowing into private equity, you know, you could sell to the next pool. Uh, but when money stopped flowing in, you had to sell it to somebody real. And turns out nobody else wanted to pay those crazy prices.”