Monday, November 17, 2008

Great Worldwide Writedown Hits Private Equity

Private equity underwriters (PEU's) continued to shed value on both the debt and equity side. Carlyle Group co-founder David Rubenstein bragged in Hong Kong about his firm's buying back affiliate debt on the cheap. Corporate debt is going for 60 cents on the dollar.

PEU equity is also on sale. Institutional investors, including big endowments and pension funds, are selling their private equity stakes on the secondary market. Bids have come in as low as 50 cents on the dollar.

The great unwinding continues, even as private equity enters its "golden age". But new deals await and Hank Paulson indicated the TARP would look for matching private investment. How long before a Treasury-Carlyle Group deal? Will Olivier Sarkozy and Randall Quarles hit a home run in their first public deal? Stay tuned...