John At The Center

I’m not sure how the term to “fail” here is defined but I can agree that PE firms may be in trouble.

Banks fail when there are issues with capital sources or there are liquidity issues.  PE firms have more or less stable capital sources in the short term as long as their LPs honor capital calls, so there is a bit of difference here that we have to acknowledge.

If this were to come to pass, it’s a no-brainer to think the firm’s principals would be in the dole queue for bailout money.

via naked capitalism: Taleb Foresees Private Equity Firm Failures If Stock Market Falls.