What’s next for Private Equity

November 2, 2009

Today’s  Private Equity Professional Digest summarizes a recently released report from Grant Thornton and the Association for Corporate Growth titled “Private Equity in the Post-Boom Era: What’s Next?

The private equity market is cyclical, and our strategy does not rely on short-term time horizons.  Having just closed BPV II, we consider this report as two votes of confidence:  (1)  a VOC from our LPs who helped us exceed our fund target in a difficult environment, and (2) a VOC in our approach – including disciplined valuations and minority investments.

As for fundraising, the precipitous decline in investments returns, coupled with the troubled economy and liquidity issues, left limited partners anxious about investing in private equity funds. Despite this skittishness, investments made in the next few years will likely generate significant returns. Limited partners with capital to invest will reap the benefits of being involved in deals that happen during this period. One strategy gaining in popularity is to buy minority stakes in businesses because buyers don’t need a lender to finance the transaction.

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