Tags: private | equity | fundraising | Bird

Private Equity Fundraising Soars to 5-Year High

By    |   Wednesday, 02 October 2013 08:22 AM

The private equity industry appears to be rebounding strongly from the 2008-09 financial crisis, as low interest rates enable private equity firms to finance deals.

Private equity funds raised almost $308 billion this year as of last Thursday, The Wall Street Journal reports. That sets up the industry for its biggest nine-month total since the record showing of 2008, according to Preqin research firm.

John Bird, co-founder of Albion Financial Group investment advisers in Salt Lake City, is of two minds about the private equity space.

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On one hand, "this is a real potential minefield," he tells The Journal. "One in 10 of these private equity deals might earn enough to make it worthwhile for someone, and the others can easily blow up if investors aren't careful."

But apparently Albion believes it can hit that one in 10, because his firm is putting some of its clients' money into private equity funds, The Journal reports. "It's a huge part of the market that can provide more diversification to a portfolio over time," Bird explains.

For non-wealthy investors interested in private equity, there's an exchange-traded fund — PowerShares Global Listed Private Equity Portfolio (PSP).

Meanwhile, Joseph Baratta, Blackstone Group's global head of private equity, doesn't sound so bullish. "We are in the middle of an epic credit bubble, the likes of which I haven't seen in my career in private equity," he said at a conference last week, according to CNBC.

While Blackstone is "bullish" on the U.S. economy, "valuations we have to pay relative to the growth prospects are out of whack right now," Baratta explains.

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Related Stories:

Hulbert: Private Equity Funds' Superior Performance 'Largely an Illusion'

Blackstone's James Says Private Equity Good Times Just Starting

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The private equity industry appears to be rebounding strongly from the 2008-09 financial crisis, as low interest rates enable private equity firms to finance deals.
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2013-22-02
Wednesday, 02 October 2013 08:22 AM
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