Second-Half Outlook Optimism

It seems I’m failing at this whole “vacation” thing. I’m set to appear on CNBC’s Squawk Box program at 8:10 this morning, to discuss the second-half private equity outlook.

In short, I’m optimistic that the heady dealflow pace will continue. The industry is being faced with a number of challenges — tax law scrutiny, bond pricing difficulty, public shareholder activism — but most of those will have more impact on PE fund returns than on PE deal activity.

Even a slight deal slowdown would still leave 2007 as the busiest private equity year on record. The first twoquarterso f this year saw around $693 billion worth of announced deals (including leverage), according to Thomson Financial. That compares to just $328 billion over the same period in 2006, and $794 billion for all of 2006.

Moreover, a huge amount of capital keeps flooding into the market. Buyouts Magazine will report today that U.S.-based buyout firms raised $76 billion in Q2 2007, which is up from the $68 billion in Q1 07 and the $47 billion raised in Q2 06.