Steve Eisman: "private equity is going to go through a long period of very troubled times"

This industry really took off post-GFC, like exploded.  Now it its defense, one of the reasons why it exploded is because the banks had to pull back, so somebody had to replace them.  But on the other hand, there's another aspect to this which I think is really hurting them, which is:

You're an institution.  You are not previously invested in private equity.  You were in public markets.  '08 was unbelievably painful because you lost basically 40% of your money like that [snaps fingers].  You don't want that volatility anymore, so what you did was you put money into private equity because at least you could pretend that is wasn't volatile.  Now private equity is just as volatile as the public markets.  It's just that you don't get a price every single day.  So you could sleep at night pretending to yourself, "I got my money with some great professionals in private equity who are going to make me a lot of money and it's not volatile."

And I think that's one of the big reasons why that industry grew so much.  Now no one's getting monetized, rates keep going higher - this business only works on low rates because it's a leverage business.  I think the private equity business is going to go through a long period of very troubled times.

~ Steve Eisman, "Big Short Reunion w/ Danny Moses: Rising Rates, AI & Private Equity, The Real Eisman Playbook, 25:05 mark, October 19, 2026