Buyout Competition

Abstract

As the alternative investment industry grows, the boundaries between hedge funds and private equity firms are starting to blur. Currently, there are approximately 9,000 hedge funds with almost $1 trillion in assets compared to the 3,000 private equity funds, with $150 billion of capital. Cash flushed hedge funds are moving into private equity investments, which have the ability to return cash when many other investment vehicles become stagnant. This increased competition in the buyout sector may place a higher value on transparency as a key element in vying for investors' money. Despite these developments there is still no replacement for a strong track record—experience and returns are still king.