That's certainly a possibility, but I wouldn't put it at the top of the list without ruling out the possibility that they actually make money.

Where does the claim that PE debt is a loser come from?

According to one of the top links on google, state pension returns from PE investments is almost twice that of their stock investments if you look at 2000-2021 (11%/yr vs 6.9%/yr)

https://caia.org/blog/2022/07/20/long-term-private-equity-pe...

Those returns are completely different. Private equity assets cannot be easily sold. Try realizing that 11% return and you will quickly see it does it not exist. You need to take a substantial haircut to sell.

I've honestly don't understand what you're saying. What are those returns different from?

We're talking about private Equity debt so I would think the 11% would be cash Returns on loans per year.

If you make 11% per year return on your lending portfolio over multiple decades, how is that not comparable to your stock market gains?

Sure, resell of loans might be harder, but they're paying cash interest.