The heart of the current bubble is probably private equity.

The claim is a hedged ('probably') prediction with no horizon. It is judged once the bubble deflated, in the 2007–2009 bust, by asking whether private equity (leveraged buyouts and the credit financing them) turned out to be the central component of the bubble. TRUE if authoritative post-crisis analyses (official inquiries, central bank reports, major academic histories) identify private equity or LBO excess as the core of the bubble. MOSTLY TRUE if private equity is identified as one of the two or three leading components, alongside others of similar weight. MOSTLY FALSE if those analyses treat private equity and leveraged loans as a real but secondary part of a broader credit bubble whose heart was elsewhere, e.g. US housing and mortgage securitisation. FALSE if private equity is treated as peripheral or unaffected, with no meaningful role in the bubble and its collapse.

Set before the research began.

1. E1 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “The use of debt in buyouts became particularly prominent in the run-up to the 2007–08 financial crisis, and has implications for the fragility of the corporate sector and, consequently, the resilience of the financial system.”

2. E2 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “In the mid-2000s, there was a dramatic increase in acquisitions of UK companies by private equity funds. The leverage on these buyouts, especially the larger ones, was high.”

3. E3 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “While insolvencies in the United Kingdom have accounted for around 30% (in unweighted terms) of private equity exits since 2009, these make up less than 1% of overall UK insolvencies.”

4. E4 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “The use of debt in buyouts became particularly prominent in the run-up to the 2007–08 financial crisis, and has implications for the fragility of the corporate sector and, consequently, the resilience of the financial system.”

5. E5 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “Chart 3 illustrates the importance of CLOs in this originate to distribute model — arbitrage CLOs, which primarily contain private equity sponsored leveraged loans, grew dramatically between 2004 and 2006.”

6. E6 Private equity and financial stability Bank of England (Quarterly Bulletin 2013 Q1, by David Gregory) · 2013

   “A significant factor in the dramatic increase in the quantity of buyout debt was the ‘originate to distribute’ model.”

7. E7 Crisis and Response: An FDIC History, 2008–2013 Federal Deposit Insurance Corporation (FDIC) · 6 June 2025

   “The U.S. financial crisis of 2008 followed a boom and bust cycle in the housing market that originated several years earlier and exposed vulnerabilities in the financial system.”

8. E8 Crisis and Response: An FDIC History, 2008–2013 Federal Deposit Insurance Corporation (FDIC) · 6 June 2025

   “By the end of the 2000–2006 period, the rapid rise in U.S. house prices had transformed from a boom to a nationwide housing market bubble.”

The FDIC's history of the crisis says the 2008 crisis followed a boom and bust in the US housing market, which had become a nationwide housing bubble by 2006 (E7, E8). The Bank of England's 2013 analysis says buyout debt was particularly prominent before the 2007–08 crisis, and that CLOs holding private-equity-sponsored leveraged loans grew sharply between 2004 and 2006 (E1, E2, E5, E6). It links the growth in buyout debt to the originate-to-distribute model [E6], without ranking private equity against other parts of the bubble. Taken together, the FDIC places the origin of the crisis in a US housing boom and bust [E7][E8], while the Bank of England documents a real build-up of buyout debt without ranking it against other parts of the bubble [E1][E6]; on balance this points towards mostly false, where private equity played a real part but the heart of the bubble lay elsewhere.