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The Centre for Economic Policy Research (CEPR), and Long Term Investors @Unito, invite you to join the online launch of the first LTI Report: "When the Tailwind Stops: The Private Equity Industry in the New Interest Rate Environment". 

Monday 28th February 2022
11:00-12:15 EST (New York)
16:00-17:15 GMT (London)
17:00-18:15 CET (Torino)

The consistent growth of long-term alternative asset managers in the past four decades coincided with the secular decline in interest rates. This has been an important tailwind for the private equity industry’s development as debt markets became increasingly cheaper, and institutional investors were searching for ways to offset the shrinking yields on their fixed income portfolios. The past decade, however, has marked a new monetary policy regime: short-term rates have been trapped at zero and it is clear that the favourable environment of declining rates will no longer be there. This development is likely to redefine the growth trajectory, composition and economics of the private equity industry in the decades to come. This report expands on the dynamics at play that shape the development of the global private equity industry and its interaction with the interest rate environment and explores the consequences of deceleration in its growth.

Join the author Victoria Ivashina, editor Pietro Garibaldi and discussants Francesca Cornelli, Gilles Moec, and Ugo Panizza for the online presentation and discussion of this report.

Alex Cukierman, 15 October 2016

The decline in long-term interest rates has nurtured the view of a persistent shift of the natural rate into negative territory. This column argues that existing estimates of the natural rate, based on the New Keynesian model, are likely to be biased downward. It makes a case for introducing long-term risky natural rates into the analysis of monetary policy, which could shed more light on the role of risk attitudes, the structure of financial institutions, and regulation in the determination of potential output and economic activity.

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