When all you read is gloom, turn here for a much different perspective.

Saturday, August 14, 2010

Leveraged Buyouts Reach $42B Year to Date

The big banks are now openly seeking out deals to back once again. And in response, some savvy private equity firms have sought to accelerate what they do best -- acquiring firms and then reselling those companies at a premium.

Following retrenchment in activity in 2009, this year buyout firms have been seeking to put their billions of dollars in untapped investor capital to use by taking on additional risk.

For instance on Friday, the Blackstone Group, one of the largest private equity holding companies, agreed to buy Dynegy, the Houston power company. The price tag -- $4.7B -- the largest of the year.

According to Thomson Reuters that brings the total for leveraged buyouts to just over $42B in calendar year 2010.

Friday's transaction continues to remind us that big money is betting on a world economy that grows steadily well into next year.


  1. Do you think the Fed is too gloomy about growth? It seems as though it is less optimistic than just a few months ago and that folks are thinking, "if the Fed is unsure about the economy than that must be bad sign or worse, that the Fed really thinks the economy is rolling over again."

  2. So far I have observed a Fed that responds to what it sees as current conditions. I don't see anything that indicates that they are more or less optimistic than just a few months ago. It is clear however that they will do everything they can to assure continued growth in the short term. In fact the only dissenting vote on the board maintains that they are in fact doing too much to stimulate growth.

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  5. Do you think the Phily Fed negative reading suggests we are going to have a double-dip? I've seen some forecast showing 2nd quarter GDP will be revised down to about 1%.

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