Once upon a time, there was an easy way to tell the man on the street the difference between Blackstone and BlackRock. Blackstone was a private equity colossus, while BlackRock was a giant institutional and retail money manager. Now, all of a sudden, this distinction has become fuzzier.

BlackRock, which oversees more than $3.6 trillion in assets worldwide, is set to start its own private equity group, hiring three founders of Merrill Lynch’s private equity arm to help it become a player in the last alternative area where BlackRock lacked a direct presence.

The new private equity group will be part of BlackRock’s alternative investment division, which manages some $115 billion in assets, already one of the country’s largest alternative asset managers. Although the firm offers private equity through funds of funds, today’s announcement trumpets the firm’s intention to create its own branded private equity funds.

Fresenius Medical Care will pay 485 euros ($649.5 million) for International Dialysis Centers, a company currently owned by private equity-backed Euromedic International, Reuters reported. Fresenius is the world’s largest dialysis company. International Dialysis operates 70 clinics, mainly in Eastern Europe. It’s parent company, Euromedic, is owned by Merrill Lynch’s private equity arm and by Swiss billionaire Ernesto Bertarelli, Reuters said.

Remember when PE firms backed out of signed deals in droves? They looked like jerks at the time, but in retrospect, they were probably smart to avoid the overpriced, highly leveraged deals they had aggressively pursued for the past three years.

Taking into account the Dow’s record breaking drops last year, and assuming that a company’s stock price reflects its health, let’s look at the stock performance of 2008’s busted take-private targets and recoil at the premiums PE firms might have paid.