In Private Equity, Bigger is Almost Always Better

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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.

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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.

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(Source: MSN)

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