Some private equity firm managers have indicated they’d rather to be investing more, but they’re trying to avoid overpaying at a time too few firms are willing to sell, according to The Wall Street Journal and The New York Times report released.
Private equity firms ended 2013 with a record $1.07 trillion in “dry powder,” or capital committed but yet to be invested. But some deal makers have indicated that tough competition among buyers and high prices for sellers are creating some challenges, including lofty valuations.
“A number of private equity executives have noticed an increase in competition for deals in the last year or so,” The New York Times reported. “Low interest rates and generous bank financing have also contributed to a market in which prices can rise to dizzying heights, deal makers say.”
The Wall Street Journal quoted Blackstone Group President Hamilton “Tony” James as saying sustaining the same level of investment as in 2013 has been difficult. “It is frustrating for our guys to keep going after things and keep getting outbid,” James reportedly said.
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