In Private Equity, Bigger is Almost Always Better
It’s a pretty good time to be working in private equity, despite the slowdown in dealmaking over the last month. The PE industry saw aggressive inflows during the first half of 2013. But be forewarned: if you’re working at a smaller shop, you’re likely facing an uphill battle when it comes to fundraising.
Private equity funds raised $186.1 billion during the first six months of 2013, a 30% increase compared to the same period in 2012, according to a Private Equity Investing report obtained by FIN Alternatives. The PE industry is on pace to have its best fundraising year since the crisis. Buyout funds had an equally good first half, raising $89.1 billion, the most since the first half of 2008.
Unfortunately for smaller firms, the wealth isn’t being shared equally. It’s the rich who are getting richer. The five largest funds combined to raise an astounding 23% of all capital during the first half of the year.
“More and more, [investors] will only partner with managers who can show an impressive track record, which makes the fundraising environment as challenging as ever,” said Dan Gunner, director of research and analytics at Private Equity Investing. “Indeed, the market dominance of the largest funds to close is clear to see.”
By all indications, big PE firms are likely to only get bigger. Limited partners like pensions plans are looking to double down with established premier funds while paring back the number of funds they invest in. Not surprisingly, the number of PE firms that closed their doors during the first half of the year increased over the same period in 2012. If you can, find work with one of the big boys.
Here’s a look at who can handle the risk and rewards of working for Cameron and Tyler Winklevoss, the Facebook-suing twins who just launched a Bitcoin Trust.
Longtime Knight Capital Chief Executive Thomas Joyce resigned from his post following the firm’s merger with Getco. The move was required after Knight lost more than $450 million due to a computer glitch, putting it at risk of going bankrupt.
Top brass at Bank of New York Mellon breathed a collective sigh of relief this week when a Manhattan judge dismissed a lawsuit alleging executives ignored red flags indicating the bank was overcharging clients for trading currencies.
First PIMCO and now DoubleLine Capital. Jeffrey Gundlach’s $38.8 billion DoubleLine Total Return Bond Fund saw a $1.22 billion net outflow in June, marking the first month the fund has ever suffered net redemptions. Bond funds ought to be nervous.
Former ACA Financial Guaranty executive Laura Schwartz, a key witness in the government’s case against former Goldman Sachs Group VP Fabrice Tourre, will not face charges herself. Tourre is being tried in civil court for his role in the complex debt security scandal known as Abacus.
Exponential Growth (Bloomberg)
BlueCrest Capital Management made three high-profile hires within its credit-derivatives unit. The hedge fund has roughly doubled its assets since the end of 2009. If you’re a trader in need of work, look them up.
J.P. Morgan’s $546 million settlement with the trustee representing former investors of MF Global has been approved.
Buzz Around the Office
Kiss Your Freedom Goodbye (HuffPo)
A Florida woman was jailed on felony battery charges after allegedly kissing a police officer on the nose.
List of the Day: Midlife Crisis
If you notice yourself doing these things, the dreaded midlife crisis may not be far off.
- Desiring a simpler life.
- Reminiscing obsessively about your childhood.
- Taking no pleasure in your friends’ successes.
