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Fidelity to close private equity division

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."

Continue reading Fidelity to close private equity division

KKR and Fidelity team to offer access to IPOs

Investors have long coveted hot initial public offerings. But access to the biggest IPOs usually requires big money and insider connections. However, a deal between Kohlberg Kravis Roberts & Co. and Fidelity Investments may change that.

The companies are reportedly near a deal to give some of Fidelity's 20 million individual and institutional clients access to IPOs by the stable of companies in which KKR has made private equity investments.

Continue reading KKR and Fidelity team to offer access to IPOs

Shareholders' private equity pushback

Lately, we've seen some considerable pushback from major shareholders on private equity deals. Yes, these investors want to maximize their returns. In fact, key investors like Fidelity have a fiduciary responsibility to do so.

As a result, we are seeing a tug-a-war and shareholders seem to have an edge. Just look at the Clear Channel (NYSE: CCU) deal. Despite two increases in the bid, the buyout deal still had to be delayed and may not get done.

There's an excellent piece on this in Bloomberg.com. Basically, the focus is on the mighty Fidelity, which has $1.4 trillion in assets. Yes, that's a lot of leverage.

This does not mean deal activity will diminish. There's simply too much money in private equity funds (that is, they get paid by putting money to work).

Rather, it's good news for individual shareholders who -- over the years -- had little choice but to leave money on the table.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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