Private Equity Trade Group Formed; PE Capital Available Exceeds $700 billion

Private Equity Council

Eleven leading U.S. private equity firms have formed a trade group, the Private Equity Council, as the industry, with an estimated available capital of over $700 billion, becomes a more powerful force in the nearly $4 trillion global mergers and acquisitions market.

Private Equity Council (PEC) will be based out of Washington, D.C. and will conduct research and provide information about the industry to policy makers and others interested in understanding what private equity is, how it operates and the increasingly important role this alternative asset class plays in the U.S. and global economy.

Douglas Lowenstein will assume the role of President and CEO in February, 2007, when PECs operations formally commence. Lowenstein is now President of the Entertainment Software Association, the trade association representing the U.S. video game industry. 

Initial members of PEC include: 

  • Apollo Management, 
  • Bain Capital, 
  • The Blackstone Group, 
  • The Carlyle Group, 
  • Hellman & Friedman, 
  • Kohlberg Kravis Roberts & Co. (KKR), 
  • Madison Dearborn Partners, 
  • Providence Equity Partners, 
  • Silver Lake Partners, 
  • Texas Pacific Group and 
  • Thomas H. Lee Partners.

In 2006, private equity managers around the world will raise more than $300 billion. Today the estimated available capital of the private equity industry exceeds $700 billion.

Private equity firms have conducted more than $664 billion of buyouts this year, according to Thomson Financial, accounting for 18% of global merger and acquisition volume, nearly twice as much as a year earlier.

The top buy-out deals this year include: 

  • HCA Inc. for $21 billion, 
  • Equity Office Properties Trust for $20 billion, 
  • Freescale Semiconductor Inc. for $17.6 billion, 
  • Harrah's Entertainment Inc. for $17.1 billion, 
  • Univision Communications Inc. for $12.3 billion.

In the U.S. alone, LBOs, on a dollar basis, accounted for 27% of the mergers and acquisitions this year, according to Dealogic. By comparison, private-equity-backed deals accounted for 14% of all domestic M&A in 2005 and just 10% of U.S. deals in 2002.

 

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