Private equity thrived during the low-interest-rate era, leveraging debt to enhance returns, but changing financial conditions are testing its resilience. While assets under management continue to grow, firms are struggling to deploy capital and exit investments, with a rising backlog of unsold assets. 

Higher interest rates have complicated deal economics, and a shifting IPO landscape has limited traditional exit strategies. Regulatory scrutiny, particularly on antitrust grounds, has also slowed transactions, making liquidity harder to generate. 

Despite these challenges, liquidity remains accessible through dividend recapitalizations and secondary sales, suggesting the industry’s issues are cyclical rather than existential. 

Finsum: If we are entering a more volatile financial era, private equity’s debt-driven model may need to adapt to a world less favorable to leverage.

The rise of private credit has reshaped the landscape of speculative-grade debt, absorbing many of the riskiest borrowers that once relied on public high-yield bonds. With banks retreating from direct lending due to regulatory constraints, private credit firms have stepped in, fueling a market now worth $2.5 trillion globally. 

This shift has left the high-yield bond market with a stronger credit profile, narrowing yield spreads and reducing volatility. However, private credit’s lack of transparency means that credit risk hasn’t disappeared—it has simply moved to a space where prices and risks are less visible. 

While public high-yield bonds have become scarcer and more expensive, some riskier borrowers are returning to public markets through structured investment vehicles. Ultimately, as economic conditions shift, both public and private debt markets may face renewed pressures, exposing hidden risks within private credit’s rapid expansion.

FINSUM: Though private credit obscures some risks, economic stress could still expose vulnerabilities across both public and private debt markets.

Estate planning is becoming a key differentiator for financial advisors, with 80% of clients expecting support in this area, yet many advisors still overlook it. A significant gap exists in tax planning, as nearly 90% of clients worry about tax impacts, but less than half have taken proactive steps. 

Beyond taxes, estate planning ensures smoother asset transfers, addresses state-level taxes, and clarifies how heirs receive funds. Many clients also lack knowledge about trusts, particularly the benefits of revocable versus irrevocable structures. 

Advisors who integrate estate planning into their services are growing their books faster by attracting new clients and strengthening relationships.

Finsum: Advisors who ignore it risk losing assets to competitors who offer these essential services.