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Wanted: a few good sponsor deals

NEW YORK ( TheStreet) --The new normal for private equity appears to be one where general partners must go their own way, without consortium strategies and a herd mentality to mint a fortune off deal fees.

In the meantime, bankers will have to count on strategics that hoarded cash during the recession to generate their fees. So far into 2013, that hasn't exactly panned out well for banks.

The news is that big private equity deals are dead right now; or at least consortium deals are finished. Instead of mega mergers and acquisitions, the deals that have come to characterize private equity as of late are decidedly unflashy buys: Bain Capital Partners and Golden Gate Capital teaming to buy BMC Software in a $6.9 billion deal, or Kohlberg, Kravis & Roberts $3.9 billion leveraged buyout of industrial machinery maker Gardener Denver.

There has not been a PE deal for more than $10 billion, in the pure traditional sense, since the onset of the financial crisis nearly five years ago.

The notion that the buyout of Heinz is, in fact, a private equity deal is downright absurd: Warren Buffett's Berkshire Hathaway (BRK.B) wasn't just the party with most of the deal's equity. It was his relationships that were crucial in securing financing, as well.

In fact, the contrast between the flurry of strategic deals, such as drugmaker Perrigo's (PRGO) $6.7 billion deal to buy competitor Elan (ELN), the $35 billion mega-merger between Publicis and Omnicom (OMC), and the latest struggling attempt at a mega-LBO (leveraged buy out)--meaning Dell (DELL)--serves as a reminder of how private equity's buying behavior has changed since the financial crisis, when nearly every large-cap PE firm hitched billions onto deals that would go on to tarnish the industry and cost limited partners dearly.

Michael Dell and Silver Lake continue to try to bend their stake into one that would be sufficient to buy Dell. Carl Icahn continues to throw kitchen sink after kitchen sink in the way of their intentions. The latest beef in the ongoing deal saga is Icahn's challenging the LBO team's attempt to rearrange voting rules on the eve of the Aug. 2 shareholder special meeting date.
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