Private Equity firms performance issue and more changes yet to come

Private equity firms continue to struggle and I can't believe how quickly things are changing in these markets! U.S. private equity firms are reporting substantial write-downs on their portfolios for the year, but investors are already anticipating the next round of cuts if the equity markets continue to fall. “I’d expect more markdowns” if current conditions hold. Similar to hedge funds, many PE firms will go out of business or PE industry will consolidate. Some of the big name PE firms are reporting:
· Blackstone written down 31 percent for the year and 20 percent for the quarter
· KKR Private Equity Investors, listed in Amsterdam, said this week that its net asset value, had been cut in half by the end of December from a year ago and had dropped 32 percent from the third quarter.
· Carlyle Group wrote down its buyout fund, Carlyle Partners IV, by 13.8 percent
· Terra Firma, whose biggest investment is the music company EMI, reported a 42 percent reduction in the fair value of its investments. .... more at The New York Times