Thursday, May 15, 2014

PEU Rubenstein "Froth Returns"

The Sydney Morning Herald reported:

Mr Rubenstein, who was speaking at the SALT hedge fund conference in Las Vegas, said private equity firms were paying 2007 prices but were using more debt.

"In 2007 the average EBITDA multiple was 9.7x Now its 9.7x again but the average leverage 5.3 times, now which is higher than 2007."

Going back to 2007 on PEU deals is not making the world better.  Also, PEU's are using debt for more than acquisitions.   The debt for dividend play remains strong.  Leon Black's Apollo plans to pull $175 million from Hostess.

This may be the "sweetest dividend bite in the history of ever."  Employees sacrifice, billionaires benefit.  It's the PEU way.