Private Equity's Clever Trick to Beat the Slump

Private equity firms are in a pickle. They usually buy companies, fix them up, and sell them for a profit. But lately, it's been tough to find buyers. Interest rates have shot up, making it expensive to borrow money for deals. So, what's their clever trick? They're selling companies to themselves! It's like moving money from one pocket to another. This way, they can show a profit on paper and wait for better times.One firm, Clearlake Capital, had a big party to celebrate their success. They even had champagne and shrimp! But their secret? They were selling companies within their own funds. It's a temporary fix, but it's not solving the real problem. There are over 31, 000 companies sitting unsold. That's a record! Deal activity picked up a bit, but it's not enough. Private equity firms are stuck in a loop, selling to themselves just to keep the numbers looking good. This isn't a long-term solution. It's just a way to buy time. But for now, it's the game they're playing.