Saturday, October 25, 2008
Friday, October 10, 2008
PRIVATE-EQUITY FUNDING ON RECORD PACE
While public financial markets are in crisis, U.S. private equity firms continue to stockpile capital and have picked up the pace of their fundraising.
U.S. private equity firms raised $222.6 billion in 264 funds during the first three quarters of 2008, 11 percent ahead of the $200.4 billion raised by 298 funds in the same time last year.
That is in contrast to the halfway point of this year, when fundraising lagged slightly behind last year's pace. There's also been a slowdown in buyout fundraising. The full-year fundraising record of $313 billion was set in 2007.
Limited partners have been saying that they intend to invest in private equity at a steady pace through the current downturn. Many of these investors have learned their lesson after the venture bubble burst in 2000.
Distressed firms, which are calculated in the buyout/corporate finance category, are seeing strong interest from investors, with 18 funds raising $37.9 billion so far this year, up 28 percent from $29.5 billion raised by 16 funds at this point last year, according to the report. Distressed firms raised a record $48.2 billion in 2007.
U.S. private equity firms raised $222.6 billion in 264 funds during the first three quarters of 2008, 11 percent ahead of the $200.4 billion raised by 298 funds in the same time last year.
That is in contrast to the halfway point of this year, when fundraising lagged slightly behind last year's pace. There's also been a slowdown in buyout fundraising. The full-year fundraising record of $313 billion was set in 2007.
Limited partners have been saying that they intend to invest in private equity at a steady pace through the current downturn. Many of these investors have learned their lesson after the venture bubble burst in 2000.
Distressed firms, which are calculated in the buyout/corporate finance category, are seeing strong interest from investors, with 18 funds raising $37.9 billion so far this year, up 28 percent from $29.5 billion raised by 16 funds at this point last year, according to the report. Distressed firms raised a record $48.2 billion in 2007.
Friday, October 3, 2008
CONGRESS PASSES BAILOUT BILL
Treasury’s $700 billion rescue plan for financial markets passes 263-171, winning approval from the same House which rejected it four days ago.
Going forward now, Treasury will have immediate authority to invest $250 billion and little trouble getting a second installment of $100 billion. But Paulson will be subjected to much greater oversight than he first proposed, and a future Congress could potentially deny any funding beyond the first $350 billion authorized in the legislation.
Taxpayers are promised a greater chance to gain some equity interest in the companies benefiting from the government aid. And new restrictions are imposed on executive pay and severance packages for those firms that sell more than $300 million in securities to the government.
Treasury official admit that it will take several weeks to begin to put the program into effect. And together with Federal Reserve Chairman Ben Bernanke, Paulson is exploring how best to use new auction mechanisms to not only guide the government’s investments but also shed new light on the real value of assets suppressed to “fire sale" prices after the collapse of the U.S. housing bubble.
Treasury will also have to sell bonds to raise the money, meaning Paulson’s early investments may be limited to just $50 billion a month. And for this reason, the real future of the initiative could rest on whomever succeeds President Bush in January.
Going forward now, Treasury will have immediate authority to invest $250 billion and little trouble getting a second installment of $100 billion. But Paulson will be subjected to much greater oversight than he first proposed, and a future Congress could potentially deny any funding beyond the first $350 billion authorized in the legislation.
Taxpayers are promised a greater chance to gain some equity interest in the companies benefiting from the government aid. And new restrictions are imposed on executive pay and severance packages for those firms that sell more than $300 million in securities to the government.
Treasury official admit that it will take several weeks to begin to put the program into effect. And together with Federal Reserve Chairman Ben Bernanke, Paulson is exploring how best to use new auction mechanisms to not only guide the government’s investments but also shed new light on the real value of assets suppressed to “fire sale" prices after the collapse of the U.S. housing bubble.
Treasury will also have to sell bonds to raise the money, meaning Paulson’s early investments may be limited to just $50 billion a month. And for this reason, the real future of the initiative could rest on whomever succeeds President Bush in January.
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