Private Equity: Plenty of powder or getting plowed?

Posted Mar 25th 2009 3:40PM by Alex Salkever
Filed under: Bad News, Money and Finance Today, Recession, Take it Private!

Quadrangle Group, a powerful investment bank and private equity player headed by Steven Rattner (the on-again, off-again Car Czar for the Obama team), has stopped trying to raise money for it's new private equity fund, according to PE Hub. Private equity has certainly gotten a bad rap of late, with many market seers claiming that the whole PE industry was headed for a giant blowup.

The percentage of deals done by private equity shops fell by over 50% in 2008. Many of the university endowments and state and municipal pension funds that had been key patrons of PE fundraisers are now so far underwater that they can't even conceive of coughing up cash for PE, let alone explaining why they are reserving money for an asset class that looked incredibly toxic in 2008. Certainly, the PE sector will bounce back because every single pension and endowment fund manager will chase the highest returns, even if there is no strong statistical research that PE profers higher returns (or even any returns) over time.

Alex Salkever is Director of Research at Piqqem.com, a stock research community powered by the Wisdom of Crowds.

Tags: fundraising, inthenew, private equity, PrivateEquity, quadranglegroup, Rattner