Private Equity - the year that was

It was a year of huge records for Private equity, that is if you sidestep over the pothole in the road called the credit crunch.

First the great news:

1. Deal volume reached a record $1.5 trillion in mid December of 2007, up from $1.4 trillion in the same time last year.

2. Money raised by Private equity funds was also at an all time high with $199.4 billion raised by the end of the third quarter, up from $154.1 billion raised in that time period in 2006. 3. Good to know that

3. 2007 saw some obscenely huge deals - such as the $38.9 billion dollar acquisition of Equity Office Properties trust by Blackstone.

Then the, well, not so great news:

image Deal volume, in dollars, was down in the second half of the year, although the number of deals did not lose too much ground (graph at left). Deals at below the 1 billion dollar level chugged on through the drought.

True, some funds went under but not too many people were mourning the loss. With the top deals getting overbid a lot, some were looking forward to the possibility of the market finally settling out.

Meanwhile people are bullish on the fact that 2008 will turn around and the PE market will gain back the lost ground. After all, they argue, the private equity firms are still sitting on large piles of cash, and they have to find someplace to put all of the money!


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