23 Nov 2025 | 5 Mins Read
Private Equity Firms Buy Junk Debt to Profit
Flipitmoney
Private equity firms are resorting to "dividend recaps" to raise $28.7 billion in debt so far this year, surpassing 2021's record, to pay out to themselves and investors. This tactic involves layering extra borrowing on portfolio companies and funneling proceeds to stakeholders as the IPO market and M&A are subdued, and investors demand distributions.