Is private equity growing?

29 Jun

As the market condenses and changes companies have to find new places to make money.  Private equity firms aren’t any different, and it seems as if groups like Blackstone and KKR are actively seeking new fields like advising or capital markets.

Blackstone and KKR are taking on investment banks- in terms of advisory in the case of Blackstone, and capital markets work in the case of KKR,” Josh Lerner, a professor of Investment Banking at Harvard reported.  “The issue is, is this complimentary or is it a distraction?”

Blackstone Group was the first to expand in this way, and they are currently doing better than ever.  They are currently billed, rightfully so, as a global leader in alternative asset management and advisory services.  And according to head of global capital and asset management Scott Nuttall, KKR has been expanding its focus for the last several years- since at least 2008.  Recently they’ve been breaking into energy, real estate, and Asian markets.

“We’ve gone from being solely focused on private equity to becoming a multistrategy alternative investment firm that harnesses all the intellectual capital at KKR,” announced Bill Sonneborn recently

It’s gotten to the point that experts like Jean-Marc Cuvilly of the New York officeof Triago, are starting to classify these groups as more than just private equity groups.  “At one point,” he said, “you have to compare them more to Goldman Sachs than to a private equity firm.”

But what everyone is thinking of now is the debt crisis in Europe.   Bill Sonneborn explains, “What we’re trying to do at KKR is to be flexible, when we see themes or ideas, to move up and down capital structures, to exploit value for our investors.”


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