The new face of private equity ( summary)

[hestia]

In America, Steve Schwarzman who made his outfit, Blackstone go public raised envy by making profit when the private-equity boom ground to a sudden halt even though Blackstones's share price had fallen to 40% at this time.

Whereas Antonio Bonchristiano who made his company, GP Investimentos listed its shares in pulick market has GP value up by 3 times their IPO price, despite the recent wobbles in the global financial system which affected even emerging economies, which are regarded as BECR (Brasil, India, China, Russia).

However, thanks seemingly to sudden break in private-equity in America and Europe, the emerging economies is likely to be more focused by some private-equity firms such as Blackstone by having sold a stake to the government of China and another American private-equity firm by raising a fund to invest in Latin America, even though domestic private-equity firms seems to take the lead by taking advantages of getting more deals than foreign firms.

Mr. Bonchristiano and his co-leader Mr. Lambranho of GP have already succeeded in fundraising of its record $1.3 billion as its fourth fund from international investors and plan to go fifth fund as over 40% of $1.3 billion has already been invested in three deals.

The main reason Brazilian private-equity could take the lead among other emerging economies is that it has some favorable conditions.

First, Brazil has endured its unstability in macroeconomic so that investors have become confident in economy of this country.

Secondly, it has focused on growth and operating improvements in private equity rather than relying on leverage which could damage economy especially when credit markets were tightened.

Lastly having few rivals in private-equity unlike other big emerging economies, can make investors' palatable to their motivation to invest at this country.

In the meantime, the Brazilian IPO market has had excellent years at the beginning of none in 2003, ending up around 70 floatations of this year.

Through IPO along with operating its fund of Equatorial Energia and Submarino, GP could make profit by 33 times and ten times on its stake respectively.

In order to keep GP to take the lead in private-equity in Brazil, GP needs to manage to expand its size beyond Brazil and overcome environmental issues such as credit crunch and economic slowdown in America.

Finally, it need to have capability of competing with Mr. Schwarzman and blocking the inflow from other big foreign firms.

[Statesman]

ground to a sudden halt -> grounded to a sudden halt / emerging economies is -> emerging economies are

[hestia]

thank you ^^;;

[Statesman]

BECR (Brasil, India, China, Russia).=> BRICs (Brasil, India, China, Russia).

[Statesman]

Managing the private equity firm is very difficult. The size of the private equity is more than expected. With a small number of people, they invest and control a lot of money. Do we have that kind of ability? In Korea, maybe not. We can be the that sort of people. That is why we study the economist magazine.

[hestia]

What should come with first when it come to the ablility of managing the private equity then? i just wonder ...