Private Equity's Surprising Slowdown

It may look like private equity firms are taking over the M&A field, but the rising stock market could put them at a competitive disadvantage

It might seem, based on the financial headlines of the last year, that private equity firms have gained unlimited power in the world of corporate mergers and acquisitions. Private equity funds smashed one record after another in 2006, raising more cash, doing more deals, and taking a larger piece of the M&A market than ever before. Private equity accounted for nearly 20% of all global M&A in 2006, compared to just 4% during the previous M&A market peak, in 2000 (see BusinessWeek.com, 12/28/06, "Private Equity's Big Winners").

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