Diminishing Returns to Scale in Private Equity (w/ Andrew Akers, PitchBook)

PitchBook data shows mega buyout funds are consolidating capital while underperforming middle-market funds, with most "alpha" actually beta from leverage and sector bets.

• Consolidation is extreme: Top 5% of U.S. PE funds raised ~60% of buyout capital in 2026 vs. ~33% 25 years ago; global PE AUM (~$6T today) is forecast to hit ~$9T by 2030.
• Beta, not alpha: PitchBook's take-private prediction model shows most "operational alpha" is really sector bets (heavy tech, underweight financials), 2-2.5x leverage, and multiple expansion versus 1.3-1.5x in public markets.

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