Filed under: Private equity, Blackstone Group L.P (BX)
With the severe credit crunch, the private equity world has come to a screeching halt. Sure, there is some dealmaking - but nothing like it was just a year ago.
So, what are the private equity folks doing? Well, they are raising billions of dollars. This is according to a piece in the FT.com (subscription required).
Although, the typical investors in private equity funds - such as pension funds - are actually losing their appetites. There are concerns about lower returns as well as larger concentrations of portfolio risk. Just look at the recent write-downs at KKR.
Yet, the top-tier private equity firms are still having little trouble raising money. TPG plans to snag $15 billion and Apollo should also get the same amount. And, as for Bain and Blackstone(NYSE: BX), it looks like they’ll get $20 billion apiece.
OK, so where is the big money coming from? Yep, it’s the sovereign wealth funds. With bulging coffers - especially from oil - the money needs to go somewhere. And, with lower valuations and distressed companies, it could be spot-on timing for those with a long-term perspective.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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