Things have been going swimmingly for private equity, according to Financial News. Firms are flush with cash from expectant investors looking to make a mint from the latest deal. Trouble is, there’ve been no deals, at least not like there used to be. According to the Centre for Management Buy-Out Research, the industry has recorded €4.5 billion (US$5.4 billion) in deals, compared with €7.2 billion (US$8.7 billion) same time last year. The culprit appears to be the dearth of done deals involving public companies being taken private. There were 20 such transactions last year by this time, but only four so far in 2006. “It’s astonishing that public to privates seem to have dried up,” Tom Lamb of Barclays Private Equity told Financial News. “There seem to have been an increasing number of approaches made over recent weeks, but nothing is being consummated.” Speculation is that, despite the high number of buyout bids by p.e firms, shareholders of target companies are rejecting them, hoping the bidder will pony up more. The tactic doesn’t appear to be working, as evidenced by the few deals completed. “This is a case of one too many ants at the picnic,” Lamb said. “Private equity has become a victim of its own success.”
