It was clear to us before the Financial Crisis erupted that the cause and likely vulnerability was centered on CDOs, CDSs and the other synthetic instruments which had caused the distortions in the global housing market. In this situation today, there are several distortions. But it appears that the private-company arena has become the “obvious” area of investment to provide the greatest returns and so, despite their inherent lack of ready liquidity, non-traditional investors in private markets (sovereign wealth funds, state pension plans, endowments and family offices) flooded in as direct investors over the past 3-5 years. Now the early signs of danger are present. Contraction of capital in this market could well ripple into other asset classes once the ball starts rolling.