Private Equity Poaches Banks' Top Guns

Cerberus was one of the first private-equity firms to dabble in the financial services sector. Last year, Cerberus, along with Citi(C Quote) and Aozora Bank, paid $14 billion for a majority stake in GMAC Financial Services from General Motors(GM Quote).

GMAC provides auto financing, commercial finance, insurance and mortgage products, banking and real estate services.

Private equity has been pushing hard into the financial sector. Kohlberg Kravis Roberts agreed to buy First Data(FDC Quote) for $29 billion in early April. Just two weeks later, an investor group led by J.C. Flowers agreed to pay $60 a share, or $25 billion, for Sallie Mae(SLM Quote).

According to Thomson Financial, private-equity takeouts topped more than $333 billion as of the end of May. At this pace, the deal flow will soon pass last year's total of $442 billion. Nearly one-third of the deal flow was in the month of May alone, the data provider said.

"The fund raising has been so strong," says Rich Peterson, the director of capital markets at Thomson. "It makes many companies possibly susceptible to deals because there is so much activity. The net is being cast wide."