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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (30780)	11/5/2006 10:46:18 PM
From: stockman_scott	Respond to of 57684

Private Equity Blows Past Record __________________________________________________________________ Buyouts push fundraising to $178 billion. redherring.com November 3, 2006 The private equity boom is at an all-time high, according to figures released Friday. Private equity and venture firms blew past their all time fundraising high last week, raising a whopping $177.89 billion since the start of the year. This beats the previous record set in 2000, of $177.75 billion. It’s possible that by the end of the year, fundraising could reach $225 billion, according to the Private Equity Analyst, which released the figures. The total raised this year has already surpassed the $158.92 billion raised in all of 2005, and is now 12 percent ahead of that sum. This number represents all equity funding raised this past year, but most of the money went to private equity buyout firms, which have been on a fundraising tear this year. In contrast, venture capital firms are still shaking off the effects of the dot com bubble. The name of the game these days is leveraged buyouts of established companies, and while the tech sector hasn’t gone unnoticed, many LBOs target sectors that are seen as bargains, such as old media and heavy industry. The potential buyout of the Tribune Company is the most recent example. The newest trend: private equity firms will join forces in what are known as “club deals” to buy out firms using leveraged capital. Recent deals include September’s record-breaking Freescale Semiconductor buyout for $17.6 billion, which represents the largest buyout in the history of the technology sector; and last year’s $11.6 billion takeover of Sungard Data Systems. Smaller deals continue to percolate as well, and no technology firm is off the table for a leveraged buyout. About two-thirds of the funding, or $118.05 billion, went to the buyout firms that have been grabbing headlines for their club deals: Blackstone Group, Carlyle Group, KKR and Silver Lake Partners. The largest, Blackstone Group raised $16.5 billion in July, and is reportedly planning to hit the $20 billion mark soon. Carlyle is not far behind, having raised $15 billion for U.S. buyouts. (See “Carlyle’s Fundraising Tear”). Another sign of the changing times: the money is being spread among a much smaller group of players overall. There are about two-thirds fewer private equity and venture firms than there were in 2000, said Jennifer Rossa, managing editor of the Private Equity Analyst. While there were 600 funds during the tech boom, there are now only 200 funds. The number crested over its previous record following the closing of a $227 million fund last week by venture firm Novak Biddle of Rockland, Maryland. However, this particular fund may not represent the capital raised in the past week, because official closing dates don’t always reflect activity, said Rossa.