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August 19, 2025 | Self-Dealing Allows PE To Keep Marking Asset Values To Fantasy
Danielle Park
As new outside investors become increasingly difficult to find, private equity firms are finding that often the best firm to sell their companies to is…themselves. Yep, you read that right.
Private equity firms are increasingly keeping themselves afloat, extracting cash and boosting their fees through self-sold transactions. See: PEs Sell Firms to Themselves Twice Over to Navigate Deal Drought.
Nearly 20% of private-equity exits in the first half of 2025 went through continuation vehicles — a process that’s exploded in popularity as private equity firms limp through a dealmaking drought (charted below since 2020).
CVs enable private equity firms to retain an asset by transferring it from one fund to another, while allowing LPs to extract cash from the transfer if they wish.
Self-dealing enables companies to sidestep market price discovery, mark their asset values to fantasy and boost their management fees while keeping existing investors believing that their equity value is increasing.
Yieldstreet is one of the best-known examples of American startups that has been hyped to the public with the stated mission of democratizing access to assets such as real estate and private asset markets.
Now, it has come to light that some Yieldstreet customers who participated in its real estate deals face huge losses on investments that they say turned out to be far riskier than they thought. See, When invest like the 1% fails: How Yieldstreet’s real estate bets left customers with massive losses:
Of 30 deals that CNBC reviewed information on, four have been declared total losses by Yieldstreet. Of the rest, 23 are deemed to be on “watchlist” by the startup as it seeks to recoup value for investors, sometimes by raising more funds from members.
Yieldstreet said some of its real estate funds were “significantly impacted” by rising interest rates and market conditions.
Here is a direct video link.
This should all be illegal, but this is the world we are working with.
US President Trump recently signed an executive order instructing the Secretary of Labor to confer with the Secretary of the Treasury and the Securities and Exchange Commission to determine the most feasible way of adding private equity, real estate, digital currency (crypto), and other alternative investments to individual retirement accounts like 401(k) plans.
This is all sure to bring more profits for product sellers and disastrous outcomes for individual investors.
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Danielle Park August 19th, 2025
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