The Wall Street Journal reports that "Leveraged finance is down 82% this year, while announced M&A is down 64% and fee income from private-equity firms is down 74%, according to data from Dealogic and Banc of America Securities analyst Michael Hecht." Private equity and venture capital deals have screeched to a halt, with no clear signs of improvement.
Not only are deals not getting done, but the market is so barren that some firms have actually had to return to investors funds that were previously raised! Candover, one of the UK’s largest private equity firms, just announced that it will give back a large portion of the €3 billion that was raised for its latest fund. Candover is not alone--Permira in the UK and TPG in the US have also returned money to investors.
Private equity and venture capital in the US and Europe has conceded that nothing is working. So rather than play in a broken field, it seems like many firms have quit, been forced to quit or are waiting for someone else to clean up the mess.
What does this mean for private equity and venture capital in China?
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