The Next Bubble Is Already Here - Chamath Palihapitiya

Summary

In this All-In Podcast clip, Chamath Palihapitiya argues that private equity as an asset class is 'hosed': zero-rate leverage pulled in a flood of laggard managers, distributions have been scarce for four to five years, and returns are heading to zero, so capital should leave PE and concentrate in a few proven firms such as Silver Lake. He says the money leaving PE has already leaked into private credit, which he calls the next big bubble. The conversation then turns to the dysfunctional IPO market, where traditional IPOs are underpriced and direct listings peak on the first trade, and to Chamath's new SPAC 'American Exceptionalism', pitched as a low-cost, incentive-aligned route to going public. No specific public ticker receives a directional call.

• Chamath: private equity is 'totally hosed' - zero-rate leverage attracted too much capital and laggard managers who overpay, so returns trend to zero as they did in VC and hedge funds.
• His one metric for any alternative asset class is DPI; PE distributions have been few and far between for four to five years, so money should leave PE and concentrate in well-run firms like Silver Lake.
• Private credit (lending to businesses), which has absorbed the money leaking out of PE, is described as the next big bubble that is building.
• Jason Calacanis worries that take-privates such as EA keep great companies (Stripe, SpaceX) out of retirement accounts, that continuation funds are spreading to venture, and notes the secondary market for private shares is reviving.
• Chamath: traditional IPOs are expensive and mispriced (bank-allocated day-one pop, then drift), while direct listings such as Slack and Coinbase trade highest on the first print, so sell on day one.
• Chamath's SPAC 2.0 'American Exceptionalism' removes sponsor warrants and compensation unless the deal works; 98.7% of its capital came from blue-chip institutions.
• He envisions a 'Raptor 3' SPAC that pre-wires billions in common PIPE capital for a pre-baked IPO at a fair price.