Rowan contrasts bank leverage of 12-14x with zero leverage at typical institutional investors and mutual funds.
“A bank is levered 12 to 14 times. The typical institutional investor is levered zero. The typical mutual fund levered zero. Typical BDC levered 1.5 times. Typical retirement services company levered eight times.”
Rowan distinguishes between traditional private equity and a new model of private equity without leverage or fund structures.
“I think we're heading to a world where we not just have private credit, but we have equity that is private, not just private equity.”
Rowan warns that levering data center equity owners is unsafe.
“Levering those companies, given my previous comments, does not seem to be the safest thing I've ever seen.”