NEW YORK ( TheStreet) -- After making big returns investing in distressed banks during the financial crisis, private equity giants like The Carlyle Group (CG) and TPG Capital may be looking to exit amid a revival in sector M&A.
But stock investors beware, there's little reason to bank on big takeover premiums.
Recent analysis by research firm KBW highlights that as bank M&A heats up, private equity players who bought or took big stakes in distressed banks during the financial crisis may be active sellers as they lock in returns for limited partners.
KBW notes that trading a basket of bank stocks they highlight as takeout candidates has been a winning proposition for many private equity investors. The basket of 27 private equity backed banks KBW outlined -- and a separate list of banks it highlights as potential sellers -- have both risen roughly 30% in 2012, double overall sector returns."We are beginning to see signs that the much anticipated M&A wave is gaining momentum," writes KBW analyst Christopher McGratty in a Sept. 25 note to clients. "
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