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Kim Kardashian seeks secret of private equity success amid rising interest rates

IFM_Reality star Kim Kardashian
Kim Kardashian stated that she wanted to learn the secrets of investing after starting her own fund last year

Reality star Kim Kardashian’s arrival at a gathering of the world’s top deal brokers in Berlin failed to dispel her gloom as the rising cost of money slows the private equity industry.

Flanked by bodyguards, Kim Kardashian lured hundreds of executives to the SuperReturn industry event and said she wanted to learn the secrets of investing after starting her own fund last year.

In an event, speaking about her goals, Kim Kardashian, whose empire includes skincare and clothing, said she was looking for creators of businesses that her fund, which has not yet made an investment, could support who have what she called the “magic sauce.”

Experts noted that private equity is currently going through one of its roughest periods since its emergence in the 1980s. The funding that supports the industry is becoming increasingly scarce and expensive due to the rapid increases in interest rates to battle inflation.

Since borrowing costs have been at historically low levels for more than a decade, investors have been able to purchase businesses using sizable loans before reselling them to other investors who are similarly encouraged by low credit costs, experts stated.

Now, euro-zone data shows banks are cutting off credit after the European Central Bank hiked interest rates by the highest rate in its 25-year history.

The value of private equity-funded mergers and acquisitions in Europe over the five years was about $46 billion.

According to data from Refinitiv, sales in the months to the end of May are 74% lower than the same period in 2022. The technology sector saw the highest number of deals globally, while healthcare deals reached $16 billion.

“It has been easier in the past, deal flow is reduced significantly…we have to pedal harder,” said Jose Pfeifer, who leads Investcorp’s European private equity group, on the sidelines of SuperReturn.

On the other hand, corporates are also driving some activity in Europe by streamlining portfolios and selling non-core assets.

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