Wednesday, September 17, 2008

Private Equity is like so yesterday

In early 2007 if the deal was there several large private equity firms could have teamed up and found 75 billion dollars.


No problems except that they couldn’t find the deal to do.


The deal is there today. AIG, 75 billion down at 10%, 60% equity stake out the back.


Alternatively buy the whole shebang for another 4 billion and be done with it.


The deal makes sense. Certainly a whole lot more sense than paying 30% over 2006 stock market values for most large private equity deals.


But the AIG can’t be done because private equity is a shadow of its former self.


That I guess is a measure of how long the certainties of Wall Street last. A week is a long time in the markets. 18 months is like - forever...


John Hempton

No comments:

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.