Going Private

One of my 2006 predictions was private equity firms would target a number of services firms like CSC.

But as this BusinessWeek cover story describes private equity is targeting a number of industries in a huge way around the world and attracting heavyweights like Jack Welch, ex GE and Lou Gerstner, ex IBM. In an interview, Lou explains two drivers for private equity- too much capacity in every industry and the need to restructure. And the fact that technology is fundamentally changing every industry. Which may explain why Lou and Vivek Paul, ex Wipro are being recruited by private equity firms.

In the US, Sarbanes Oxley is actually encouraging more companies to consider going private. Talk about unintended consequences.

Talking about private money - in technology, venture capitalists have traditionally played a role in early stages. Bill Burnham argues that hedge funds may be moving in to the VC space. One reason - fewer public companies to invest in! Another unintended consequence...

Update: Forbes weighs in with a cautionary article on private equity.