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Private Equity Party Is Ending and We’re Exhausted, Carlyle Says

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The private equity dealmaking boom is peaking after a frenetic year that’s left the industry exhausted.

That’s the view of Carlyle Group Inc.’s co-head of European buyouts Marco De Benedetti, who says firms have probably finished the catch-up necessary after last year’s hiatus. The trend of doing deals faster will likely remain though, which means managers need to permanently adjust how they conduct due diligence, he told the SuperInvestor forum in London on Wednesday.

“We are peak in the terms of deal activity,” De Benedetti said, adding that the ramping up of capital deployment and fund raising cycles would also likely remain. “Speed is here to stay,” he said.

The news may be welcomed by executives tired from frantic scrambles to respond to deal opportunities while rushing due diligence and other checks in half the time usually allotted. The pace was so intense that Carlyle made staff take mandatory time off to recharge, De Benedetti said.

Companies will need to restructure themselves so they can screen opportunities ahead of time and respond faster to proposals with smarter use of data analysis. That will favor bigger managers with more resources, said De Benedetti.

“Today, if you start looking at an asset when the formal process starts, you are going to lose,” he told the audience.

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