Buyout bosses convene under gathering clouds

By Megan Davies and Eleanor Wason

NEW YORK/LONDON, Feb 24 (Reuters) - Private equity chiefs will convene for a major conference in Munich, Germany, this week in an industry atmosphere that is markedly changed from last year.

Rewind to February 2006, when chat at the "Super Return" conference was about the multibillion-dollar deals they were considering and which buyout firms might themselves go public.

Coming on the heels of deals such as the $31.8 billion buyout of energy company TXU Corp. and the $22.9 billion buyout of office landlord Equity Office Properties Trust, private equity seemed invincible.

Blackstone Group's co-founder Steve Schwarzman told reporters at the conference, held last year in Frankfurt, that he had sized up massive buyout targets: "We've looked at things in the $50 billion range," he said. "We looked at one deal of that size in Germany, but the stock went up too much, so we couldn't do the deal."

David Rubenstein, co-founder of buyout firm Carlyle Group, was quoted in the Independent newspaper at the time as predicting that a $50 billion deal would be pulled off by the end of the year, while a $100 billion deal was possible within two.

A discussion about the pros and cons of private equity firms going public took place, months before Blackstone launched its initial public offering.

A month earlier, in an interview with the Wall Street Journal in January 2007, private equity icon Henry Kravis of Kohlberg Kravis Roberts & Co said: "I have never seen a time like this when money is so available and so global."

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