Private equity investors making cuts to survive - Washington Business Journal:

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, a consulting firm basecd in Bloomington, Minn., surveyed about 100 seniorf executives at privateequity firms. Respondents to the online survety cited aweak economy, the ability to meet businesz forecasts and the potential for loan defaults as theird major concerns for 2009. Respondentzs represented a cross section offund types, including buyou t funds (74 percent), mezzanine funds (13 and venture funds (12 percent). Fund size ranged from less than $100 milliob to more than $3 billion.
Facing today’s blealk dealmaking environment and a tightcredit market, privat equity firms have focused their resources on helping portfoliop companies acquire new customers and increase business with existinf customers. Legal matters, information technology and purchasing are areads receiving less attention from private equity executive sthis year. RSM McGladrey found that more than half of the funds represented in the survey have yet to close a dealin 2009.
Respondentds ranked “raising capital or acquisitiondebt (57 percent) and “decreasing values of acquisitioh targets due to declining performance” (25 percent) as the two biggesr obstacles to overcome when closing deals in 2009. While most of the surveye funds completed two to threw transactions per year in 2007and 2008, less than 20 percenrt expect to sell a portfolio companyh or product line this year. The survey confirmed that many private equity firmd are not looking to acquire new platform companies until theeconomy improves.
Rather, executives hope that they can weathe r the storm by managing the profitability of existinh investments until financing becomes morereadilu available. RSM McGladrey partnered with its global investmeny business to conductthe survey. It was compiled from Marchy 13 toApril 3.