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Wednesday, February 27, 2013

Private equity investors temper return expectations, (NASDAQ: DELL)

Private equity investors hoping for outsized profits are facing an awkward truth - investment returns have shrunk and are unlikely to go back to their peak levels. At private equity's annual global gathering in Berlin this week, investors acknowledged that the asset class looks unlikely to revert to its bumper past payouts, weighed down by modest global economic prospects as well as an influx of funds into the sector creating increased competition for deals."It's just too hard to see, with the level of capital out there, the baseline rates and the lack of growth globally, that you will be able to generate the kind of returns that were available in points of time in the past," Howard Searing, director of private markets at pension fund manager Dupont Capital Management, told the SuperReturn conference in Berlin.Granted, prospective returns from the corporate buyouts that are private equity's stock in trade are still generous set against meagre bond yields and volatile stock markets. It's just that they are less generous than they were.A rise in leveraged takeover activity mostly in the United States, culminating in the $24.4 billion offer for computer maker Dell Inc backed by private equity firm Silver Lake as well as the company's founder, has seen private equity fund managers spend more of their investors' money on deals.

Dell, Inc. (Dell) is a global information technology company that offers its customers a range of solutions and services delivered directly by Dell and through other distribution channels. Shares of DELL remained unchanged at $13.88. In the past year, the shares have traded as low as $8.69 and as high as $17.70. On average, 37226500 shares of DELL exchange hands on a given day and today's volume is recorded at 0.