Many of the bit players are being flushed out of private equity by the tight credit market, and Fidelity Investments, which will close its private equity division next month, is no exception. While buyouts have never been a significant part of the company's business, the firm was managing $500 million as part of an operation that was founded two years ago -- at or near the height of the private equity boom.
Fidelity's private equity arm has investments in four companies, but spokeswoman Ann Crowley told The Wall Street Journal (subscription required) that "Basically debt financing is largely unavailable because of the economic conditions of the last several months."
Back when the operation was announced in May of 2007, BloggingBuyouts contributor Tom Tauli wrote that "In light of all the dealmaking lately, a $500 million fund does seem kind of small. Then again, it may be a way to get some experience and build a strong foundation."
Fidelity's dabble into private equity could not have been timed more poorly, and that gave it little hope of developing into a significant factor in that industry, regardless of how smart the deal makers over there may be.
