When two popular trades, such as buying US big tech stocks and selling the Japanese yen, are unraveling at the same time, investors naturally think they are somehow related.

Global investors are gobbling up bonds that can be turned into stocks, feeling good about the prospects and return potentials of smaller companies.

Cathie Wood seems to have the worst timing on artificial intelligence stocks. She offloaded Nvidia Corp.’s shares in early 2023, failing to grasp the popularity and disruptive power of ChatGPT.

Just as private credit is becoming an asset class of its own and private equity houses are finding a new revenue stream away from their bread-and-butter buyout businesses, this burgeoning part of leveraged finance is losing steam.

Two major events are shaking up the asset-management world. Blackstone Inc. raised $1.3 billion for its first retail private equity fund, targeting those who have at least $5 million to invest.

Private credit is an asset class that has blossomed alongside the Federal Reserve’s rate hikes. From sovereign funds to family offices, many people want to put their money in. Asset managers are more than happy to latch onto this enthusiasm.

When asked about how tighter regulations affect banks’ business models, JPMorgan Chase & Co.’s Chief Executive Officer Jamie Dimon commented that it was great news for hedge funds and private equity firms.

When we talk about shadow banking, we think of China, one of the world’s most indebted nations. Lending by companies that do not own a banking license has reached 50 trillion yuan ($7.3 trillion), or about 42% of gross domestic product, according to Moody’s Investors Service.

Macro hedge funds, which look at economic trends and take advantage of dislocations across asset classes, had a banner year in 2022.

As banks get burned from financing billion-dollar buyouts and pension funds grow impatient with private equity’s endless thirst for capital, skepticism is growing louder over the industry’s performance — and whether some of their daredevil deals could result in disastrous losses for their financiers.

Call it a taper tantrum, times 10. Developing nations are reeling from the double whammy of Federal Reserve interest-rate hikes and China’s economic slowdown.

When the liquidity tide recedes, investors from sovereign wealth to billionaire family offices are getting even more impatient with hedge funds. They are discovering that a lot of these expensive money managers don’t really hedge, and the pivot toward private equity was the right decision after all.

When it comes to collecting debt from distressed companies, a wait-and-see attitude will only end up with investors losing everything. That’s especially true with China’s real estate developers.

After a record fundraising year, there are worries that private equity’s golden era is over.