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You are here: Home / M&A / M&A Weekly Digest – August 17, 2012

M&A Weekly Digest – August 17, 2012

August 17, 2012 By Lindsey Perkins Wade

Ever wondered what the term “dry powder” means and what impact it has on your privately owned business? Ever wondered what private equity’s real return on investment was? Well, wonder no more as these topics and more are covered in today’s M&A Weekly Digest. Click on the headlines to read the full articles. 

Private Equity and its Return on Investment (ROI)

“Unfortunately it appears that we are going to be hearing a lot of misinformation about private equity and its focus during the next few months. I was thinking of this not long ago when one of the largest pension funds in the U.S. released its returns for the past fiscal year. Overall, CalSTRS [a pension fund representing the California State Teachers Retirement System] showed slight growth of 1.8% on its investments in its fiscal year that ended June 30…

Although the 1.8% return was far lower than their annual benchmark target of 7.5%, there was some really good news if you drilled into the components of the funds’ returns. One shining star was private equity, which generated an annual ROI of 5.9% in the last fiscal year. This data caught my eye because as we have discussed in the past, private equity is a critical investment vehicle for most pension funds, endowments, and charities.”

Dry Powder

“As you know, there are lots of discussions in the M&A press right now concerning ‘dry powder’ or the private equity ‘overhang’…according to Preqin, the total overhang is approximately $900 billion…By any measure, this is a considerable amount of capital. Since a significant amount of this was raised pre-recession, in both 2007 and 2008, we expect to see acceleration in private equity activity over the next 12-18 months.”

Generational Equity Introduces New M&A Hotline: 877-217-8240

 “[W]e have decided to create an M&A hotline. By calling the Generational Equity hotline you will be able to have a private, confidential discussion with one of our M&A professionals about any topic relating to the M&A process. And we promise that this will not be a high-pressure sales conversation. Our goal is to efficiently and effectively answer any questions you have and not waste your valuable time.”

© 2012 Generational Equity, LLC All Rights Reserved

Don’t put off planning your financial future. Learn about selling a business with Generational Equity‘s whitepaper, Selling A Business – Finding Buyers.

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Filed Under: M&A, M&A Weekly Digest Tagged With: private equity, private equity investment, private equity overhang, ROI

About Lindsey Perkins Wade

Lindsey Perkins Wade is managing editor of The Private Business Owner.

The Private Business Owner – A Generational Equity Blog

The Private Business Owner is an online publication sponsored by Generational Equity. PBO aims to provide useful tips and information that will improve both the lives and businesses of entrepreneurs, as well as provide valuable insight into the company exit process through bi-weekly M&A Digests.
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