The private equity industry's capacity for leveraged buyouts continues to decline. Here are some reasons for this trend: Monetizations of portfolio companies have been talking longer in recent years. That traps investors' capital, reducing capacity for redeployment in new funds or in some cases for recycling in existing funds.
Back when the Executive and Congress at least pretended not to abdicate all power to the Fed, one of the centerpiece programs designed to boost the housing market for the benefit of the poor (as opposed to letting Ben Bernanke make marginal US housing a rental industry owned by a handful of private equity firms and hedge funds), was Barack Obama's Home Affordable Modification Program (or HAMP), which attempted to prevent foreclosures by lowering distressed borrowers’ mortgage payments.
It might be time to take the alternative out of alternative investing strategies considering their tremendous growth over the past few years. Non-traditional investment assets under management now exceed US$6-trilllion globally after growing more than US$600-billion in 2013, and investors are only planning to increase that amount this year.
The financial crisis of 2008 was the impetus many investors required to look beyond the traditional asset classes of publicly-traded equities and bonds and into the world of alternative investments. Others, battered by the volatility in the stock market, chose to liquidate their equities in favour of significantly adding to their bond holdings.
Inquiring minds are digging into a Fed white paper regarding The U.S. Housing Market: Current Conditions and Policy Considerations.
Here are a couple of key snips. The bold headings are mine.
Overriding Private Contract Rights
With the world’s largest miners flocking to sell assets, cost cuts across the industry and a virtual drought in buyers, private equity funds may finally be tempted into a sector long seen as potentially lucrative but risky.
Industry veterans say the coming months will be a test of whether private equity funds can turn intentions into investments and become more than niche players in an industry that has traditionally relied on public markets for cash.
By David Sims:According to the FHFA, a program to sell pools of foreclosed homes—real estate owned (REO)—to investors is seeing "robust" demand with "strong qualified bidder interest." The program was launched in February and during the second quarter, bids were solicited to sell 2,500 REO properties to investors.
It's a mistaken assumption that the world of private-equity investments is only available to the rich and famous. In truth, however, there are plenty of opportunities for investors to put funds to work with firms that specialize in high ROI opportunities. Some of these are public companies where one can buy stock and hold a diversified set of investments. In other cases, private start-ups and professionally managed private funds can be fou