Some private equity firms that are keen to put their swelling cash piles to work are paying for expensive acquisitions of fast-growing companies mostly out of their own pockets and trimming back their reliance on debt.
“You can finance an acquisition with a lot of equity, but you will only make a big profit if your company posts strong growth and its valuation gets a boost,” comments Oliver Gottschalg, a professor of strategy and business policy of HEC Paris.