Enter leveraged buyout firms, which are flush with capital and hungry for deals.
Sales and initial public offerings of companies owned by buyout firms are slowing at an even faster pace, Preqin says.
That is far smaller than the amount required to move the needle for mega buyout firms like Blackstone or KKR.
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Goldman Sachs , Warburg Pincus and Carlyle Group have been among the most active U.S. buyout firms in the country, according to Thomson Financial.
Venture capitalists argue that they occupy a very different corner of the world than buyout firms like Blackstone and Kohlberg Kravis Roberts (KKR).
Buyout firms realized that, in view of the credit crisis, they were overpaying for Sallie Mae and United Rentals and tried to wiggle out.
The Wall Street Journal reported today that Dell has recently held talks with buyout firms Silver Lake Partners and TPG about going private.
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Whistleblower Is Key to New York Tax Probe on Buyout Firms.
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Investor protection is a hot topic in Congress and regulatory circles, with heightened scrutiny on the activities of private pools of capital like hedge funds and buyout firms.
VCs, they say, are in the business of fostering entrepreneurship with start-up money, while buyout firms acquire a company, trim out the fat, then dump it for a handsome profit.
Jon L. Luther, chief executive of Dunkin' Brands, a portfolio company of buyout firms Bain Capital Partners and the Carlyle Group, is slated to present the softer side of private equity to Congress on Wednesday.
By contrast, the British Venture Capital association (BVCA), which represents both venture capital firms and buyout firms, was first founded over 25 years ago and the European Venture Capital Association (EVCA) has been operating since 1983.
Despite the large volumes of cash flow generated by most of these companies, the leveraged buyout firms seem to be steering clear of two sectors prominent on our list: the highly competitive auto industry and the highly regulated utilities.
Then there are the IPOs by buyout firms themselves, a trend that started this spring with Fortress Investment Group but which picked up a lot of steam when Blackstone floated 10% of its management company in June.
What it means for the broader markets is a likely slowdown in buyout activity as the banks pull back from lending with easy terms and as buyout firms balk at paying higher interest rates to fund their purchases.
Issuance of these loans exploded just before the crisis, as buyout firms launched ever-larger takeovers and banks engaged in a destructive race to the bottom, ceding a huge amount of power to borrowers and ending up with large losses.
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Alibaba prefers a friendly deal with Yahoo, but it could still revisit an alternative plan to bid for the whole company in conjunction with buyout firms if the cash-rich split-off proposal falls through, people familiar with the matter said.
Then there are the IPOs by buyout firms themselves, a trend that started this spring with Fortress Investment Group (nyse: FIG - news - people ) but which picked up a lot of steam when Blackstone floated 10% of its management company in June.
Generous compensation plans and perks might be put in place because buyout firms need to maintain good relationships with corporate managers, who choose which firm will take them private and then eventually public again, says Michael Klausner, Nancy and Charles Munger professor of business and professor of Law at Stanford University.
Institutional investors infuriated by management's attempt to buy two construction companies controlled by relatives of Satyam's founder have reportedly sounded out IT firms and buyout funds about their interest in the software and back-office services heavyweight.
To adjust to the new buyout world, private-equity firms are looking for high-growth and smaller companies.
Adequate cash reserves can help fund research and development, make dividend payments, buy shares back, entice buyout offers or even acquire other firms.
There is a range of other possibilities, of course, including a buyout by a collection of private equity firms.
That six-times-revenue buyout is higher even than other recent acquisitions of firms similar to Fortify that aim to build security into software development.
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This goes beyond an earlier tax attack on a public offering by the Blackstone Group, and would slam into all private partnerships, including buyout funds, hedge funds, venture-capital firms, real estate partnerships, and oil-and-gas deals.
But on paper Ben Bernanke, cheap debt, and a rising stock market have rescued private equity from suffering a complete disaster from the buyout boom of 2005 to 2008, when private equity firms raised and invested unprecedented sums of cash.
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This has been the primary reason for the stock rallying in the past two weeks as many firms have expressed their interest in participating in a buyout of Yahoo.
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However, shares rebounded quickly and rose to their highest level of the month as investors speculated that this decision will likely make it easier for the company, which had been the subject of potential buyout speculations in the past, to be acquired by private equity firms.
Refco has been advised by some of Wall Street's best and brightest, including the three firms already mentioned, as well as outside auditors Grant Thornton and buyout firm Thomas H.
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