Cisco Systems, Inc. (CSCO) December 20 and January 20 calls were active with total call option volume of 497K contracts compared to 143K puts. December and January call option implied volatility is at 22, February is at 26, compared to its 26-week average of 30 according to Track Data. Large volume suggests traders positioning for movement.

Charles River Laboratories (CRL) closed up 3%, on Relational Investors LLC and the California State Teachers' Retirement System having a combined 6.1% stake in the company, and wanting the company to put itself up for sale, reports the Wall Street Journal. January option implied volatility of 29 is below its 26-week average of 34 according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Not long ago, institutions and sovereign wealth funds salivated over the opportunity to invest in private equity operations. But, as seen by the lowly stock prices of the Blackstone Group LLP (NYSE: BX) and Fortress Investment Group (NYSE: FIG), things are much gloomier now.

Interestingly enough, TPG has spent some time trying to drum up interest in an equity stake. And, it looks like there were serious talks with the Kuwait Investment Authority, the California Public Employees' Retirement System and the California State Teachers' Retirement System. However, according to a report in the Financial Times, it appears that negotiations have ended.

With depressed markets, it would seem that private equity funds have many opportunities to pickup some good investments at compelling valuations. In fact, this environment seems particularly good for top-tier operators, such as TPG, KKR and Blackstone Group LP (NYSE: BX).

Well, perhaps not.

For example, according to a piece in the Wall Street Journal (subscription required), Blackstone will likely snag a mere $250 million form the California State Teachers' Retirement System (Calstrs) for its next fund. Keep in mind that Calstrs pumped in $1.7 billion in the prior fund from Blackstone.

Is this a sign of a chill? Of course, we won't know for awhile. But, Calstrs is influential. Besides, pensions are probably getting a little edgy as the credit crunch is still in effect.

Although, another concern may be that Blackstone is now a public company. As a result, there is less confidentiality and maybe even more conflicts. For instance, may a private equity fund cash-out of a deal too soon so as to meet the quarterly earnings expectations?

If so, this could be bad for other private equity firms planning to become public, such as Apollo and KKR.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.