An acquisition too far

Stifled laughter at the PEI/EMPEA Emerging Markets Private Equity Forum in London as Chip Kaye, co-president of Warburg Pincus, punctuated a typically assured keynote speech with an untypical lapse. Reflecting on the firm's activities in Central and Eastern Europe, he referred to the acquisition of a “country” before swiftly correcting himself with the word “company”. The hubris needed to acquire an entire nation would have been an overly aggressive move in the 2005-2007 period, never mind in these humble times.

“LPs are fiduciaries for every other LP in the fund. Nobody makes money on uninvested capital.”

George Siguler, founder and managing director of fund of funds group Siguler Guff, during a panel discussion at the PEI/ EMPEA Emerging Markets Private Equity Forum in London. He said that limited partners who discourage private equity fund managers from making investments in order to avoid facing capital calls should be sued, and more figuratively “beaten over the head”

“So long as the markets are open you don't panic and you whittle away at this stuff. It is not as though all of a sudden 2015 arrives and $1 trillion comes due and you have to line up at the window and have to pay it.”

Kohlberg Kravis Roberts co-founders Henry Kravis and George Roberts, when asked about the difficulties of refinancing mega-buyouts in an interview with the Wall Street Journal

“We have $27bn of dry powder to invest today and benefit from an impenetrable financial position with $2bn of cash on our balance sheet. Many of our competitors are not so lucky and many are being forced to give back capital, to downsize and to change strategy. We see consolidation opportunities across our business lines.”

Tony James, Blackstone Group president, telling the Financial Times about Blackstone's appetite to act as a consolidator in the alternative assets industry

“Private equity helped the US economy, but didn't play a major role in helping the economy become the largest in the world. But the Chinese private equity industry can and will play a much bigger role than the US private equity industry did in developing the economy.”

David Rubenstein, co-founder and managing director of The Carlyle Group, speaking at a private equity conference in Beijing