Private Equity's Year from Hell
The financial crisis has damaged investors great and small, and private equity funds are no exception. These funds, and the investors who plunked down millions to back their deals, appear to be facing big losses as more of the companies that they used leverage to buy -- and to take cash out of -- are defaulting on their debt and starting to file for bankruptcy. It's only logical that the targets of these leveraged buyouts, with their hefty debt obligations financed at junk-bond rates, are succumbing as the economic slowdown causes cash flows to dwindle and lending terms to tighten.
Copyright 2008 BusinessWeek
