The Rise of Equity

By James McEvoy

Private Equity is charging ahead. Liquidity is huge among equity investors and brokerages, and companies who can be bought and sold are numerous. Investors such as Henry Kravis and Peter Peterson are having the best time ever being buyout kings. The market is even now bearing Equity firms going public. We just saw a perfect example in Blackstone’s very anticipated IPO.

Now the Senate wants to step in, and of course try and get their hands on some of the enormous money flowing through these groups. They figure by taxing them 35% instead of the 15% they pay now, they will get a few billion more to put into the federal budget. Private Equity is becoming a major powerhouse. They have always has a good stance in business, but now since there are new methods of raising cash, new ways to structure deals, and thanks to the internet, easier ways to inter-act with investors and companies worldwide, their reach has never been more powerful.

The great part is if you have some new companies, new players in the game, who now have huge access and options if they choose to pursue being an equity player or investor. Private Equity is going to end saving many businesses, and believe it or not some jobs as well. It used to be they just bought a company, fired employees and sold off the company in pieces. Now it is becoming more valuable to these firms to hold on to the companies they buy for at least 5-10 years, and in some cases longer, and help restructure them to be more profitable, and more valuable.

PE firms are rising in popularity and power. And opportunities for new investors and new companies are becoming better in finding capital to grow their companies. With this being both good and exciting, now it is time to watch and see who tries to stop this new phase in investing growth because they will consider it dangerous to the economy.