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Breakingviews: Private equity egress

Tuesday, Jun 25, 2013 - 03:12

June 25 - Rob Cox and Breakingviews columnists talk about why buyout firms seem to be doing a lot more selling than buying.

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So we're looking at the hill this week Tenet Healthcare bought and I don't -- bank guard. And it got us thinking. How all these private equity companies are exiting deals exiting -- has been found to be making any. So Robby ran the numbers it was an interest in what we saw how was. In fact that if you take out a couple of really big deals like Hines and -- this year there have been a lot like. They've been only about how appropriate that -- deals over a billion dollars and the amount of deals that -- that size of them right total of sixteen billion dollars so they're basically not putting all this money work. There but the are harvesting I mean massively if you look at like Leon black and -- a couple of -- Month ago he said you know we're selling everything that's not nailed down indeed Apollo is there's they're going out to selling everything there -- -- -- like yeah this week to visit him -- and -- The reason is because they're doing very well I mean like even like dogs of the last cycle like HD supply -- Neiman Marcus is coming in the market finally write that out there they're there that's one that's another private equity backed out of the only thing not going and markets TX units -- Like that you have to be seriously in the drags on something like like -- you exactly actually not a problem is also little we're all these firms are also a lot of them are out raising new funds. So I mean -- -- for -- returns to investors they can raise new funds. The question you know the question is terrific defense and there was there's some there's a hard drive out or they're still newborns who fought him being raised. And and you still vestiges of some of the old -- that -- -- -- can't deploy this morning accounting leverage because you know typically priced items like 31 basically. If there's about. Over 500 billion dollars worth of money they've got sitting on silent the right if they only bought 161000000001. -- -- play that -- a couple of days away and it's so what is what's going on Mike what. OK they're not. They're not they're much happier sell the narrative by which means they don't really trust the net interest price it out there you know or additional lock in as an -- these for these valuations. That's review we're hearing a lot from my speak of course now people are running it -- and that part investigative reason not to you know obviously you're Smart as weren't obviously -- pitch. Right if figuring that good the other thing however is that you hear from people. Involved in companies' boards that don't necessarily trust private equity because listening to. They think like during the last been there were several deals which got renegotiated when when credit markets start to seize up and creates supply it's a classic one that walked back to that -- -- to connect to about the price down by a couple billion dollars you know they have their free time that's already happening in this market where things are really starting to kind of go south. You can just imagine a whole bunch of private equity deals right now you would have had people trying to renegotiate prices pull out of -- lot of -- -- curious because -- the same -- that we haven't seen a lot of other and you kind of wonder where was private equity through this crisis. You know if money was she thought they were. Clearly there are a lot of dividends they were they were working a lot of different angles for sure but the big LBOs of public companies just happened relatively common effect. All right well let's have wrap it up here we'll be back for more breaking news tomorrow.

Breakingviews: Private equity egress

Tuesday, Jun 25, 2013 - 03:12

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