Private Equity’s Role in Consumer Resilience
- Jeffrey Gundlach sees Hamburger Helper ad as a sign of private-equity fueled company trying to drive growth for sale or IPO
- DoubleLine Capital’s own data shows better loss performance in 2023 and 2024 asset-backed securities vintages compared to 2022 and 2021
- Residential mortgage market is strong, but credit card and auto loan delinquencies on the rise
Jeffrey Gundlach, the founder of DoubleLine Capital and bond king, recently observed an ad for Hamburger Helper that led him to believe the economy isn’t doing well. The product was acquired by Eagle Family Food Group from General Mills in 2022 for $610 million. Gundlach sees this as a sign of a private-equity fueled company trying to drive growth for a potential sale or initial public offering. DoubleLine Capital’s Andrew Hsu and Michael Fine examined asset-backed securities in a September report, revealing that their proprietary data on personal loans shows better loss performance in 2023 and 2024 vintages compared to 2022 and 2021. The strong residential mortgage market, robust labor market, and excess pandemic savings contribute to consumer resilience, despite rising credit card and auto loan delinquencies and potential risks like depletion of savings, wage stagnation, and high prices.
Factuality Level: 7
Factuality Justification: The article provides accurate information about Jeffrey Gundlach’s opinion on the economy and includes relevant details about Hamburger Helper’s acquisition and its sales. It also presents contrasting views from DoubleLine Capital colleagues regarding the health of the U.S. consumer, including data on personal loans, mortgage delinquencies, credit-card delinquencies, auto loan delinquencies, savings, and labor market. The article is mostly factual with some focus on a specific company’s product, but it does not contain irrelevant or misleading information, sensationalism, redundancy, opinion masquerading as fact, bias, invalid arguments, logical errors, inconsistencies, or fallacies.
Noise Level: 3
Noise Justification: The article contains some irrelevant information about Hamburger Helper and Cousin Eddie from National Lampoon’s Vacation, which does not add much value to the overall discussion of the economy. However, it provides insights into the economic situation through DoubleLine Capital’s analysis on asset-backed securities and personal loans, making it more informative.
Public Companies: General Mills (GIS)
Private Companies: DoubleLine Capital,Eagle Family Food Group,Kelso & Company
Key People: Jeffrey Gundlach (Founder of DoubleLine Capital), Andrew Hsu (Analyst at DoubleLine), Michael Fine (Analyst at DoubleLine)
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses Jeffrey Gundlach’s opinion on the economy based on Hamburger Helper’s revival and DoubleLine Capital’s analysis of asset-backed securities, personal loans, mortgage delinquencies, credit-card delinquencies, and auto loan delinquencies. It does not directly impact financial markets or specific companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event is mentioned in the text and it’s not related to any major crisis or disaster.
Deal Size: 610000000
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Small
Affected Instruments: Bonds
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