- With $585B of "dry powder" money to put to use in North America, private-equity firms are increasingly looking to take minority stakes in companies and partner with them rather than buy them outright.
- Carlyle (CG) and Blackstone (BX) are among those taking such an approach, with the latter this week agreeing to purchase a 13% stake in Crocs for $200M.
- The logic of the strategy is that full deals are expensive, competition for minority stakes is less, the transactions can be custom-made, and they often don't involve auctions.
- However, the story of Hicks, Muse, Tate & Furst should serve as a bit of a warning - one of the biggest P-E firms of the 1990s spent too much on telecom investments that didn't pay off, leading to its closure.
- Other P-E firms include KKR (KKR), Fortress Investment Group (FIG), BlackRock (BLK) and Apollo Global (APO).