The private equity industry has been at the top of the wish lists of elite business school graduates for the past few years, but those eager young people might find that the industry isn't as generous as it was not too long ago.
The Wall Street Journal reports (subscription required) that "Leveraged finance is down 82% this year, while announced M&A is down 64% and fee income from private-equity firms is down 74%, according to data from Dealogic and Banc of America Securities analyst Michael Hecht."
Over the past few years, the ranks of Wall Street workers involved in deals have soared on hopes that the private equity boom represented a new paradigm. As with most new paradigms, this one proved illusory.
Consistent with the rise in new hires, revenue per employee at top investment banks fell sharply in 2007 and, if the numbers cited by Mr. Hecht represent a continuing trend, we could see another, larger decline.
Note to MBA students: those less glamorous companies that actually, say, make stuff might be on to something.
The Wall Street Journal reports (subscription required) that "Leveraged finance is down 82% this year, while announced M&A is down 64% and fee income from private-equity firms is down 74%, according to data from Dealogic and Banc of America Securities analyst Michael Hecht."
Over the past few years, the ranks of Wall Street workers involved in deals have soared on hopes that the private equity boom represented a new paradigm. As with most new paradigms, this one proved illusory.
Consistent with the rise in new hires, revenue per employee at top investment banks fell sharply in 2007 and, if the numbers cited by Mr. Hecht represent a continuing trend, we could see another, larger decline.
Note to MBA students: those less glamorous companies that actually, say, make stuff might be on to something.
