Big boys do cry

Recently, we´ve attended a big Private Equity presentation in London. One might think that most of informed investors would skip the credit crisis. No. 12 months before Lehman´s default Private Equity Funds spent 120 billion USD buying companies. Of course it wasn´t the best moment. 12 months after Lehman the same Funds spent only 9 billion.

In general these Funds followed the wave as private investors did. There were exceptions though. Some decided to enter into companies through distressed bonds. They bought them really cheap and at the end they were converted into equity giving them control of the firms. It was a risky bet that finished up being really profitable.