Why would anyone want to invest in a private-equity deal in the current economic environment?
Castle: Because things are cheaper, for one thing. Prices for private companies are down substantially, perhaps 30% or more, versus two years ago. Furthermore, sellers are frequently being forced to sell premium assets because they may be overleveraged. And they might not be able to deal with it by selling second-tier businesses. So a private acquirer can frequently buy better companies at much lower prices than in normal times. Certainly, this was what I experienced in the difficult economies of the mid-1970s, 1987, early 1990s and 2001 through 2002. Deals may be fewer than they were two or three years ago because today’s sellers are generally limited to parties that have some level of distress, but it is a time of opportunity. Where do your funds get their investment money from? Our investment funds are limited partnerships that include public and corporate pension funds, endowments and other institutional investors and affiliated individuals as participants. The minimum investment i
