Will Wall Street's Collapse Boost Private Equity Markets?

The collapse of the housing and credit markets that has crippled some Wall Street giants is likely to have a variety of effects on private equity, say faculty at Emory University and its Goizueta Business School.

The fall of Lehman Brothers, the sale of Merrill Lynch to Bank of America, and the decision by Goldman Sachs and J.P. Morgan to be placed under the purview of the Federal Reserve are driving big changes in financial markets, note faculty members. 

One likely shift is a larger role for private equity providers in financing big-ticket deals. But liquidity concerns are likely to rein in their appetite for risk, despite the just-passed $700 billion bailout package, add faculty.

"The consolidation taking place in the financial markets means the playing field is getting a bit smaller," says Thomas More Smith, an assistant professor in the practice of finance. "With fewer investment banking giants available to service big-company deals, we may see smaller private-equity firms swoop in to fill the empty spots."

Read more at Knowledge@Emory.

About Emory University’s Goizueta Business School

Emory University’s Goizueta Business School is home to an Undergraduate degree program, a Two-Year Full-Time MBA, a One-Year MBA, an Evening MBA, the W. Cliff Oxford Executive MBA (Weekend and Modular formats), a Doctoral degree and a portfolio of non-degree Emory Executive Education courses.