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Private Equity Firms Expected to Show 20-30% Losses for 2008
naked capitalism — ... Leverage cuts both ways, and it most certainly would not, in most cases, have done PE owned firms much good last year. And making the expected mere 20-30% losses (versus public market declines of more like 40%) comes when PE firms are held to more rigorous standards in valuing their holdings. That alone should have a return-depressing effect. To its credit, the Financial Times article does say the losses could be considerably worse than the rumored level. From the Financial Times: Private equity firms will in the next few weeks send their ...

Private equity to reveal losses
FT Alphaville — Private equity firms are preparing to notify investors over the next few weeks just how much – or little – the companies they invested in are now worth, with many executives saying the reported fall in value will be 20-30%. Under regulations applied this year for the first time, private equity firms are required to value their companies at current market value rather than to merely disclose the original cost of the investment. By some calculations, the actual losses could far exceed 30%, as many of these companies were bought and taken private at the peak of the buyout boom – ...