700+ LBOs studied back to 1981
GMO used AI to analyze over 700 leveraged buyouts going back to 1981 to understand what kinds of companies private equity actually buys.
Snapshot · Excess Returns
We Asked GMO’s Head of Asset Allocation Why This Bubble is Easy — But Investors Will Get it Wrong
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Jun 24, 2026
Where this was said
What 700 leveraged buyouts reveal about private equity
At 59:32 · chapter starts 55:21
GMO's AI-assisted analysis of 700+ US LBOs reveals that private equity portfolios are overwhelmingly concentrated in small, lower-quality, highly leveraged companies — with only RJR Nabisco ever qualifying as a mega-cap buyout [1] — Ben Inker "GMO analyzed 700+ LBOs and found they skewed massively toward small, lower-quality, highly leveraged companies. Only one mega-cap LBO has e…" 59:00 .
What 700 LBOs Reveal About Private Equity
GMO analyzed 700+ LBOs and found they skewed massively toward small, lower-quality, highly leveraged companies. Only one mega-cap LBO has ever occurred in US history. The average endowment with 50% in private equity is unknowingly running a giant concentrated bet on small-cap junk.
Only 1 mega-cap LBO in US history
In the entire history of US leveraged buyouts, only one deal involved a company that could be called mega-cap at the time: RJR Nabisco.
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