Reported 6 months ago
Private equity firms like Cinven and Blackstone have been utilizing margin loans backed by shares in companies they've taken public to boost returns and provide cash to clients. With up to $50 billion of debt now outstanding, these firms are facing risks as interest rates rise and taking on novel forms of borrowing against their holdings. While margin loans can help accelerate returns, they also come with the potential for significant downside, such as margin calls, as seen in the cases of Cinven and Blackstone borrowing against Synlab AG and Bumble Inc. shares respectively.
Source: YAHOO