Private Equity is coming back

This week's BusinessWeek's cover story is titled as "How Private Equity Could Revamp the U.S. Economy". Although PE enjoyed easy credit with low interest rates, the financial meltdown has given huge impact on PE. As financial institutions got afraid of lending money in financial market, PE struggled to secure money they needed to make a huge deal. Apparently, their source of finance was getting scarce and depleted.

However, pension funds, universities' funds etc that took PE as alternative investment, enjoying massive return on the investment, are still looking to PE and taking agressive position to their investment strategy.

PE was long blamed for reckless investment strategy, leveraging 10-20 times of their M&A targets' financial value to buy those target companies. But it is undeniable that PE was actually Catalyst for companies.

In fact, PE is now investing into utility and construction industries that are promised by Obama to get taxpayers' money to prop up the economy.

I would like to observe whether PE can revamp the U.S. economy.