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Breakingviews: Passing the parcels

Monday, August 18, 2014 - 02:44

Richard Beales and Jeffrey Goldfarb discuss the surge in deals where one private equity firm buys from another – and whether they will disappoint buyout fund investors.

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Does that emanate boom going on but what think private equity companies having a lot more -- is selling companies. To each -- buying them from each other. Jeff you've been looking at this one problem is that may be that is kind of deals and as much juice for investors see how long mr. just -- -- you have seen a total explosion these kinds of deals with seems like. All of us the puzzles pass the parcel of these kind of move around for a -- obviously some of them. Multiple firms Robert as you say there's as huge emanate right now private it really hasn't been able. Play and some eyesight could sell a lot of buying listed companies that there even primary companies they. They can't afford it right now they can't get them into the corporate buyers are sort of -- much better position in terms of the Kurds and they can offer synergies -- -- lot of different reasons. But. But so what the government to buy from each other -- it generally quicker transact for them to go to do it. On you know it's easy kind of formerly the whole thing the problem is there's been research that suggests. That these kinds of deals do not generate as high returns through the second corner second primary -- The returns are not as good as if you're the first -- illogical -- me -- the first and if if if the firm exit strategy is at least has time to make some improvements and changes that that needed to -- out there isn't as bad idea which is you know what's -- sometimes as a new strategy right and make more but a lot of times it's like okay we're also -- -- well yeah. -- what other kind of like incremental revenue it -- There's that problem. You experts from students that haven't traditionally done as much of Carlisle just did a five billion dollar one of these -- and other private at great cost it's just marketing firm. They haven't done one of these a couple of years that tells you. That you know they've got all this cabinet built up. On this one of the big man is so it was a private equity firms as a -- universe -- at the it was it was about a -- those of dried out as they call it on invested kind of got a lot of money -- -- start to you know as these fund lights kind of start moving on sort worry. Meters run out kind of do these deals and so bombings works just as pieces. That that may be if these deals don't go well -- that'll take little time to figure that out if the research bears out that maybe the investors in the funds. Will need to step up next round of fundraising and say hang on. We're gonna we gonna cap view at the amount on pass the -- right now you know it was him when he most needed to. Traditional kind of go and find cheap company buys them -- it from another price of the ticket media push for a little bit of protection right to you know if he's returns don't. -- -- -- -- All right thanks to leave their posts both those lateral breaking news you tomorrow.

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Breakingviews: Passing the parcels

Monday, August 18, 2014 - 02:44