Private Equity Fishing for Deals

Raising capital might seem to be a difficult task at this time in the economy but sit tight as the fish are biting.

Now is a great time to invest in private equity, David Rubenstein of Carlyle Private Equity said at Davos, noting that deals with the best returns are historically done during downturns. One problem is that sellers are in denial over their companies’ values, refusing to accept lower valuations. Instead, they’re postponing selling, hoping that prices recover.
“And sellers are probably going to take six to nine months before they realize it's not coming back anytime soon, and so they probably will sell,” Rubenstein says. “But, once we're through that, I think we'll see some extraordinary deals and extraordinary returns generated for investors.”
For the time being, deals are much smaller and have less leverage. Private equity is moving overseas. Rubenstein says, “It's clear that some of the greatest growth opportunities for private equity moving forward are in China and India and other so-called emerging markets.” John Loewen says, “We will see more and more firms begin to invest overseas.”