Yes, they also use leverage to magnify their outcomes. Since they are equity, their downside is capped (it is a call option essentially, which means they should

Yes, they also use leverage to magnify their outcomes. Since they are equity, their downside is capped (it is a call option essentially, which means they should maximize volatility to increase the option's value). You maximize volatility with financial leverage (debt). This is more profitable when rates are near-zero. Engaging in risky bets is not "unique" to private equity - this is true of any equityholder (take a look at VC). It is also typically why bondholders include covenants restricting particularly high-risk actions voted upon by equityholders. However creditors have no leverage nowadays because they need to stick their money somewhere (hello high-yield debt) and Treasuries do not provide a reasonable return. Using debt is not unique to private equity. When rates are low - arguably artificially - it makes sense to binge on debt and volatility.