The New LBO Math: How Higher Equity Checks, Private Credit, and Operational Value Creation Became the New Baseline

The assumption of ongoing rate cuts in 2026 is dead, leading to a new structural baseline for LBOs. This issue examines the implications of higher equity checks, increased reliance on private credit, and the imperative for operational value creation to achieve target returns amid flat exit multiples and increased cost of capital. Firms adapting to this "new math" are underwriting successful deals.