Before the Federal Reserve raised interest rates in December for the first time in nearly a decade, private equity firms took advantage of the low rates to issue dividend recapitalizations. The process allows PE firms to deliver returns to their limited partners without exiting the company. But now that exit multiples are holding high, dividend recaps are becoming less prevalent.  

“There’s been a noticeable drop off in leveraged dividends in the past six to nine months,” says Andrew Smith, president of Chicago-based investment bank Houlihan Capital, which is not related to publicly-traded investment bank Houlihan Lokey (Nasdaq: HLI).

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