Private equity is under assault. The current reckoning that is unfolding is a dramatic contrast to the overconfidence that prevailed in large swaths of the private equity market as recently as a year ago. For over 20 years the best private equity managers delivered on this promise. They consistently outperformed public indexes by wide margins. This performance was accomplished by operating on the fringes of the financial system, as is logical for an asset class exploiting inefficiencies. In research published recently, Boston Consulting Group estimates that at least 50% of the private equity deals done in the recent past will default on their debt. Second, investors who were yearning for yield are over-allocated to private equity and reeling from the massive declines in the value of all asset classes. Finally, the liquidity crunch has changed the availability of cheap debt to the asset class for a long time. […]