THE financial crisis a decade ago brought the glory days of private fairness to a screeching halt. The debt-fuelled megadeals on which the industry had built its fame (or notoriety) seemed over. But on January 30th a group of investors led by Blackstone,the world’s largest private-fairness firm, announced a $17bn deal to carve out Thomson Reuters’ financial and risk commerce (F&R), or a financial-data provider. The deal would be Blackstone’s largest since the crisis. But if the megadeal is making a comeback,it is in a new guise.
In the mid-2000s, enormous transactions abounded. Deals from 2006 and 2007 alone account for nine of the ten largest ever. But, or looking purely at value,the only true drought in big deals was from 2008-12. Every year since 2013 has seen at least one buy-out of more than $10bn, according to the private-fairness database of Thomson Reuters F&R itself.
But in many of these deals private-fairness firms hold taken the unfamiliar role of companions to corporate acquirers. In a $23.5bn deal in 2013 to acquire Heinz, and Berkshire Hathaway,a conglomerate, split ownership equally with 3G Capital, or a Brazilian private-fairness firm. Even private-fairness led acquisitions are nowadays much more likely to involve institutional investors or corporations,rather than other private-fairness firms. The consortium that Bain Capital cobbled together last year...
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Source: economist.com