Under the radar

Why a Davos report thinks private equity will avoid the regulatory clampdown that looks sure to hit hedge funds

NEW PRIVATE EQUITY DEALS LOOK DIFFERENT

New property Metric Pre-financial crisis Latest available
3Q06 to 2Q07 average 2Q/3Q08
More equity Average equity contribution 30-35% 40%
(% of purchase price)
Smaller deals Average deal size* $631m $244m
Fewer deals Number of completed 637 410
deals per quarter
Higher cost of funding Average spread of LBO loan 275 bps 420 bps
versus LIBOR
Increased minority Minority investment by financial 5% 31%
stakes sponsors** (% of total PE deal
volume)