Salient to Investors:
Private-equity managers from Fortress Investment to Blackstone say now is the time to exit investments as stocks rally and interest rates start to rise.
Wesley Edens at Fortress said he is preparing holdings for public offerings while struggling to find attractive new deals. Pete Briger at Fortress said the environment extends to credit and distressed investments and said this is a better time for selling existing investments than making new investments as more uncertainty has been fed into the markets.
Leon Black at Apollo Global Mgmt said last month the environment is ripe for selling because credit markets are still hot and equities strong. Black said in April said it is a fabulous environment to be selling everything that is not nailed down in our portfolio as the stock market rally has helped push up average prices for LBOs to 9 times earnings. Bain says a reasonable buyout price is less than 8 times EBITDA.
Tony James at Blackstone said last month that with credit markets hot and equities strong, it is a better time for selling assets than for buying, as activity levels shift from the US to Europe, where there is more distress, and Asia and emerging markets, where liquidity issues are arising. James said there will be a growing series of real estate sales over the next 12 to 18 months.
David Fann at TorreyCove Capital Partners said within the five-year period from 2008 to today, we have gone from one of the best times to be a buyer to one of the best times to be a seller.
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