Keep pulling the thread on Alan Waxman.
The Glass-Steagall Act of 1933 mandated the separation of commercial banking from investment banking, and the Federal Deposit Insurance Corporation (FDIC) was established to insure individual bank deposits.
In the period between the 1999 repeal of Glass-Steagall and the 2008 financial crisis, commercial banks increased their leverage to as high as 20 to 30 times.
In 2010, G20 nations passed the Basel III accords and the U.S. enacted the Dodd-Frank Act to regulate the financial industry in response to the Global Financial Crisis.
The private capital market has grown from approximately $2 trillion before the Global Financial Crisis to about $14-15 trillion today.
The private credit market has expanded from $500 billion before the Global Financial Crisis to approximately $2 trillion today.
Public market valuation multiples for asset managers' fee-related earnings (FRE) rose from 10-15x in the early 2010s to 25-30x or more before the recent market correction.
Many perpetual private Business Development Companies (BDCs) have experienced redemption requests that exceeded their stated 5% quarterly limit.
Alan Waxman does not currently believe that redemption gates in private BDCs pose a systemic risk to the financial system, partly due to a strong economic backdrop.
Allocations to private investments from the wealth channel are expected to grow from a historical average of 1-2% to over 10% in the next decade.
Approximately 9,000 banks in the United States failed in the aftermath of the 1929 stock market crash.
Alan Waxman believes many private assets acquired in 2021 and early 2022 were overpaid for and are now "stuck assets" on balance sheets.
Alan Waxman argues that the repeal of the Glass-Steagall Act in 1999 was driven by US banks' inability to compete with more leveraged and integrated European banks.