| > Doesn't that have more to do with Michael Milken pioneering junk bonds Capital was uniquely available in the 1980s. But Milken was a symptom, not the cause. The booming American economy provided the fuel, but digitisation turbocharged the engine: issuing, pricing and trading securities, in particular bonds, became easier very quickly. (This is why your stereotypical trader from the 80s has an accent and is uncouth. They replaced blue-blooded bankers who had run bonds, calculating prices and yields by hand using tables.) Put another way, America is “unusually good at creating tradeable claims on the profits and revenues that its economy generates” [2]. Computers amplified that strength and prompted massive opportunities in reshaping the economy. > with the exception of the recent hiccup, the long term trend in interest rates has been downward Yes, this is a function of increasing stability and time horizons [1]. That said, the relevant frame is a fund lifespan, usually 5 to 10 years. (Unless you’re Warren Buffett.) In those intervals, the long-term signal is dwarfed by short-term noise. [1] http://www.economist.com/news/finance-and-economics/21598651... [2] https://www.bankofengland.co.uk/-/media/boe/files/working-pa... |
And I'd be surprised if in the period between 1980 and 2021 you could find a 10 year interval that didn't exhibit significantly lower rates at the end than at the beginning, and only a select few 5-year periods.
You seem to have the viewpoint that this had nothing to do with the historical performance of PE funds?