Cornell Capital Founder on Private Equity Returns

The transcript discusses the impact of the Volcker Rule on banks, particularly its effect on regulated banks versus shadow lending groups. It explores trends in private equity and debt markets, highlighting Goldman Sachs' role. The conversation addresses risks in private lending and the evolving relationship between banks and private markets. The economic outlook is optimistic, with low unemployment and inflation, but potential risks from trade wars and political issues are noted. The future of private markets is seen as promising, despite potential challenges.

What is the primary focus of the Volcker Rule?

• Regulating private equity firms

• Limiting speculative investments by banks

• Encouraging shadow lending

• Promoting pension fund investments

Why have banks shown interest in the private equity and debt world?

• To diversify their investment portfolios

• To match long-term liabilities with higher returns

• To avoid regulatory scrutiny

• To reduce their capital requirements

What is a significant risk associated with the shift from regulated banks to private capital?

• Decreased investor confidence

• Potential for major recession

• Higher interest rates

• Increased regulatory oversight

How has the private equity market changed over the years?

• It has become a mainstream asset class

• It has become a fringe market

• It has remained unchanged

• It has decreased in popularity

What is a current economic factor that supports optimism in private markets?

• Low unemployment

• High inflation rates

• Decreasing durable orders

• Rising interest rates

What restriction does the Volcker Rule impose on big banks?

• They must increase their capital reserves

• They must divest from all private debt

• They cannot put more than 3% of their capital in funds

• They cannot invest in private equity

What potential change in the Volcker Rule could affect big banks?

• Increased capital requirements

• Mandatory divestment from private markets

• Relaxation of private equity restrictions

• Stricter lending regulations