Basic Instinct

Deck: 

If private equity makes a killing, Congress should require full disclosure.

Fortnightly Magazine - April 2007
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There’s just no stopping it. The capital amassed by private takeover firms is simply overwhelming (see “Merger Frenzy). Given the huge sums, any reasonable person could conclude that public utilities face wholesale changes in terms of corporate ownership. Investor-owed? You bet. But the “public” part may well give way to “private.”

Start with the headline-grabbing buyout offer of TXU, which may become the largest private takeover in U.S. history. Then recall that several other private buyout offers have come down the pike during the last 12 months, from both private-equity firms and distinct infrastructure funds, seeking to acquire targets such as Kinder Morgan, Northwestern, and DQE. One begins to wonder if these offers mark a tectonic shift in the structure of the industry.

(For those who are curious, the term “infrastructure funds” generally refers to private capital firms that typically seek lower returns and hold the assets longer than private equity.)

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