Is Private Equity Broken? Why the Buyside’s Problems Are Making 2026 “The Year of the Banker” | High Yield Harry

**Max Wiethe** (0:00)
Welcome to Other People's Money, I'm Max Wiethe, and today I'm joined by High Yield Harry. Harry, welcome to the show.

**High Yield Harry** (0:06)
Thanks for having me, Max.

**Max Wiethe** (0:08)
You are a leading voice in the FinTwit community and a prolific chronicler of all things related to the buy side, both on Twitter and through your venture, Buy Side Hub.
I want to start because between AI supposedly coming for the junior analyst job, the maturation, and maybe we could say saturation of private equity and the growing concerns about the state of private credit, things don't really seem great on the buy side. I'd love to hear from you whether you think that's true and is this what you're seeing from the data that you collect from thousands of buy side professionals through the Buy Side Hub?

**High Yield Harry** (0:43)
Yeah. Thanks again for having me, Max. I would say it's very bifurcated. I don't want to say tale of two cities, but there's so many different things going on at the moment that allow for a lot of folks to make money on the buy side, but it's kind of the year of the investment banker. And part of that's because of SpaceX and some of this other IPO activity that we've seen and are expecting.
But also the environment is kind of leaned more towards bankers just in terms of stability, just because a lot of PE and then private credit as well, to some extent, like those folks have had to wait on exiting positions, they've had to do continuation vehicles, fundraising has been a bit more challenged. It's just not the same environment it was from the 2010s, but also 21, 22, what have you. So one of the things that we've noticed is private credit compensations kind of like peaked a little bit. Obviously, as you progress throughout your career, you're earning higher compensation levels. But there's that worry there on the private credit side, which I think is like a 12- to 18-month lag from all these PE folks. And then on the PE side, it's really interesting because we just saw an article from FT, and there's private equity folks who are expecting their carry check to have hit by now, who are taking some sort of like non-recourse loan off of future earnings that they expect from carried interest, just to continue and subsidize, I guess, their lifestyle, given it's kind of expensive to pay through private school with some of your kids, among all the other things that come up from living in New York City. So it's a really interesting time where I think unfortunately, like some folks are more illiquid than they want to be. They definitely wanted exits, realizations, term loans to be paid down.
But that's not quite what's happening, given the environment, given multiples, fundraising rates, et cetera, and AI and software.

**Max Wiethe** (2:50)
I'd say the LPs probably feel the same way.

**High Yield Harry** (2:52)
Yeah. Yeah. I imagine they're not too happy. Hopefully, they're getting their economics.
But we've seen a lot of LPs voice concerns, both about private equity and credit.

**Max Wiethe** (3:03)
So it sounds to me like you're saying it's the year of the sell side, not the year of the buy side.

**High Yield Harry** (3:08)
Yeah. That's a really good way to say it, because we don't even have open AI and entropic quite yet.
With banking, there's just a lot of M&A activity going on and a lot of stability. Even with AI, it seems like a lot of bankers feel pretty good about this year and next year.

**Max Wiethe** (3:24)
We'll go through all three of these things. Where do you want to start? You want to start with private equity, private credit, this AI coming for the junior analyst job. What do you think is the area where there is the biggest pockets of concern?
Yeah.

**High Yield Harry** (3:38)
That's a good question. I think, first and foremost, with private equity versus private credit, you see a lot of doomerism with private credit. I think it's very fair because we've seen that even some of these well-established funds are seeing their redemption rates go up quarter over quarter. We're going to see that 5% rate hold. This is structured to not go above the 5% gate, but it is very real and very concerning that you're seeing consistent teens level redemption requests because that shows there's a lot of people in the asset class who are, one, worried, two, maybe shouldn't have been there in the first place. That's a whole different discussion we can have, too.
Then just general broader worries about the downside risk with the asset class, especially given the fact that we know AI is going to play a massive role in disrupting software companies, business services companies, tech-enabled services, stuff that for many folks equals like 20 to 35% of their portfolio.