Illiquid Insights

Data centers are being funded through SPV structures. Hyperscalers lease the facilities, and often guarantee the debt and provide equity. This allows Big Tech to keep the debt off balance sheet.

PE activity in software has collapsed. Deal value in Tech sank 67% YoY through September, per Apollo. Private equity has massive exposure to software. Many of these PortCos will be very difficult to exit.

The buyside has two main paths: > Private (PE, credit) - Compete with other funds to source and win deals. > Public (stocks, HY) - Find mispriced securities and figure out what the market is missing. Private investing is dealmaking and relationships. Public investing is a research role.

Distressed debt is a hard strategy. It’s a lot of brain damage (hostile calls, poor management, plenty of fire drills) for a 20% return. Which is why pure distressed funds have become more rare. Most now do a mix of private credit and distressed.

The bulge brackets play the long game. They’ll provide millions in unprofitable loans, wine and dine execs and spend years on bizdev that goes nowhere. Then they win one deal and make $20MM+ in fees.

Stress in private credit is highly concentrated by vintage. Direct lenders foreclosed on $22B of debt in 1H’26, per Lincoln International. 70% came from ’21–’22 buyouts, during peak valuations and leverage.

Tons of juniors in IB, PE and private credit overfocus on technical skills like modeling. Once you get past the associate level, relationships and soft skills matter a lot more for getting promoted.

A few years ago, private credit was crushing the BSL market. Today, the trend has sharply reversed. The BSL market funded $20B of LBO debt in 3Q’26, almost double private credit’s $12B. High rates are driving borrowers to the syndicated market to lower interest costs.

Data Center Financing primer ⬇️ illiquidinsights.com/product…

PE holding periods keep getting longer. 21% of PortCos have been held for 7+ years, per EY. It was 15% in '23. The exit market is still weak. Most activity has been in the large cap / megadeal space.

The most intense PE strategy is value / turnaround investing. Funds like Apollo, HIG, One Rock, etc. buy low growth or struggling companies at cheap multiples, and try to fix them. It’s very sweaty on the operating side. You’re trying to squeeze value out of challenged assets.