Private Equity: The Game That Ends With A Credit Crisis Private Equity: The Game That Ends With A Credit Crisis Submitted by Saxo Bank's Peter Garnry Summary: Private equity is one of the worst asset classes during a liquidity and credit crisis. Private equity firms cannot adjust risk because they invest in illiquid assets and their high leverage amplifies returns both ways. The recent decline has reduced the annualised return to 5% since late 2003 significantly lower than the SP 500 and with worse risk-adjusted metrics. Our view is that it will get worse before it gets better but in the rebound phase listed private equity offers fantastic returns. We provide some inspiration of where to look. Instruments mentioned: iShares Listed Private Equity UCITS ETF IQQL:xetr, Hamilton Lane (HLNE:xnas) , 3i Group (III:xlon), Apollo Global Management (APO:xnys), Ares Capital (ARCC:xnas), Blackstone Group (BX:xnys) Private equity has at the center of the lower interest rate environment the past 30 years. In the past 10 years many private equity firms have listed their shares giving the public access to private equity deal and returns.