This Ain't Your Daddy's Post-Recession

I recently accused limited partners of cognitive dissonance; refusing to invest (much) this year despite acknowledging that the best returns are borne of recessions. But perhaps I was too harsh. Too hasty. Perhaps LPs are sitting on their hands because they recognize that this post-recession is different. Private equity firms typically generate out-sized returns from post-recessionary markets because there is an abundance of bargains, which can be easily exploited. Buy low, sell high. This year, however, valuations rebounded much faster and stronger than anyone expected. So much so, in fact, that some PE pros are concerned that they're trapped inside of a mini-bubble.

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