Booyah Breakdown: Ticker Ditchers

Stock quotes in this article: BHP , AA , DELL  

We've all been forced to show up at events we'd rather not attend, such as your spouse's best friend's birthday party or your in-laws' for the holidays. And you know the scene: The moment you arrive you're trying to figure out how to get out of there.

That's exactly how the private-equity players think when they buy a new company. "It's all about the exit," says Dennis Barsky, a private-equity partner at New York-based law firm Jones Day.

The "exit" equates to a big financial payout. Granted, they just need to turn the company around and bring the company back to the market, either through an initial public offering or a sale to another company. But they have their eyes on the prize the whole time.

And for many in private equity, we're not talking about hitting the daily double on Jeopardy. This is real big money. Like early retirement on a yacht in the Caymans kind of big money.

Although private-equity firms have been around for years, they've been making quite a din on Wall Street recently. That may be because after everyone and their brother wanted to go public in the late 1990s, the trend has flipped. Now going private seems to be the in thing to do.

"In the last two years, the money raised by private-equity firms has far exceeded the most recent boom in 2000," according to Liz Ann Sonders, chief investment strategist at Charles Schwab. "This has been fueled by ample credit and by a flood of giant capital investments from many of the world's largest and most powerful pension funds."

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