Buyout CEO Says Secondaries are Preventing Private Equity Crash

The CEO of a private equity firm backed by a group of ultra-wealthy European families gave a stark warning on the industry, saying only the booming so-called secondaries market is rescuing it from a huge downturn.

Jean-Marie Laurent Josi, head of Brussels-based Cobepa, said the long period of low interest rates had made buyout firms less discriminating, and that the industry now needs to refocus on better investments and returns.

Many private equity firms are contending with a difficult period of higher financing costs, scarcity of takeover targets and problems cashing out of older deals. That’s slowed fund distributions ...