The LBO Bubble

During the last five years, Leveraged Buyout Funds, LBO funds have boasted favorable returns compared to public and venture market returns. This has caused a flood of new capital into large, mid and small market LBO firms. According to Venture Economics, LBO funds raised $46 billion in 2004, compared to Venture funds raising $18 billion. Given the run up in public market prices and this glut of new capital, it’s hard to imagine how LBO can go in any direction but down.