If you needed any more convincing that now is the right time to explore the sale of your company, take note of the news from the private equity community. Hellman and Friedman, a premier PE firm just raised $10.9 Billion for its newest fund. It didn’t take long either. They starting fund-raising in June – and the raise was oversubscribed. They are not the only ones with big money. Warburg Pincus just raised $4 billion for a fund dedicated to the energy sector. They said the raise was $1 billion higher than their $3B goal. Last year they raised companion fund of $11.2 billion.
So where is all this money coming from? Well there is a major influx of capital coming from a very strong stock market and much improved IPO market. Successful investors are looking to rebalance their portfolios and reinvest. Here’s an good example, Tibco Software, a publicly traded company agreed to sell itself to Vista Equity Partners for $4.3 billion. It’s the largest buyout in tech this year, giving the public company investors a chance to cash out and reinvest. In another PE example, Silver Lake, made a $500 million investment in Alibaba that is now worth more than $5 billion. That’s a lot of dry powder.
In fact, in the current environment, many PE firms are finding it challenging to make new investments because there is so much money chasing too few really good investments. So what’s holding you back?