Friday, January 12, 2007

More concerns on optimal deployment of mega PE funds

I have aired my concerns ( “No Way Out”) relating to the prospect of PE investors funds getting locked up for lack of exit opportunities. At that time, I was fresh from the report of Sevin Rosen Funds having retuned funds to investors citing lack of investible opportunities and laggard IPO markets.

I was also not pretty much sure about the potential for optimal deployment and returns generating capabilities of PE firms engaged in a bidding war in most emerging markets ( “Flipside of PE buyouts” ), where the acquisitive ego often side-stepped valuation math. I had flagged caveat emptor for the winning bidders in Hutch Essar.

I recently found support in a Red Herring article, where there’s an added interesting perspective on such record PE fundraising in 2006 ( 322 firms raising $215.4 billion ) and its impact across industries, Venture Capital and the relative risk and suspicion. Very insightful.

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