Summary:
In this episode, the hosts discuss the current economic environment, tariffs, and their impact on private equity. They also explore the concept of "trapped equity" and how it affects private equity firms. The conversation touches on the uncertainty created by tariffs, the risk premium required, and how it changes the dynamics of buying and selling assets.
Key Takeaways:
Tariffs create uncertainty: Tariffs lead to uncertainty, which can result in inaction and trepidation among investors and private equity firms.
Trapped equity: Trapped equity refers to assets that have appreciated in value but are difficult to sell or liquidate due to market conditions.
Impact on private equity: Tariffs and economic uncertainty can decrease transaction volume, making it harder for private equity firms to sell assets and return capital to investors.
Risk premium: The risk premium required by investors increases in uncertain times, making it more expensive for private equity firms to finance deals.
LPs want liquidity: Limited partners (LPs) want to see liquidity and returns on their investments, which can put pressure on private equity firms to sell assets.
Contrarian opportunities: In a recession, some private equity firms may see opportunities to buy distressed assets at lower prices.
Predictions:
Tariff situation: The hosts predict that the tariff situation will improve because it cannot get much worse.
Recession likelihood: Ed predicts a 100% chance of a recession in the next 18 months, while Rory agrees that it's almost inevitable.
Recession depth: The hosts believe that the recession will not be as severe as the 2008 financial crisis and that there will be intervention to mitigate its effects.
Advice for Founders and Private Equity Firms:
Be prepared for uncertainty: Founders and private equity firms should be prepared to navigate uncertain market conditions.
Look for contrarian opportunities: In a recession, look for opportunities to buy distressed assets at lower prices.
Vet private equity firms: Founders should carefully vet private equity firms and consider their investment thesis and approach in uncertain markets.
Conclusion:
The hosts conclude that private equity firms will continue to adapt to changing market conditions and that there will always be opportunities for innovation and deal-making. They also emphasize the importance of being prepared for uncertainty and looking for contrarian opportunities in a recession.
Who We Are

If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.

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