History of Private Equity and Venture Capital

History Of Private Equity And Venture Capital

The history of private equity and venture capital and the development of these asset classes has occurred through a series of boom and bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.

Since the origins of the modern private equity industry in 1946, there have been four major epochs marked by three boom and bust cycles. The early history of private equity—from 1946 through 1981—was characterized by relatively small volumes of private equity investment, rudimentary firm organizations and limited awareness of and familiarity with the private equity industry. The first boom and bust cycle, from 1982 through 1993, was characterized by the dramatic surge in leveraged buyout activity financed by junk bonds and culminating in the massive buyout of RJR Nabisco before the near collapse of the leveraged buyout industry in the late 1980s and early 1990s. The second boom and bust cycle (from 1992 through 2002) emerged out of the ashes of the savings and loan crisis, the insider trading scandals, the real estate market collapse and the recession of the early 1990s. This period saw the emergence of more institutionalized private equity firms, ultimately culminating in the massive Dot-com bubble in 1999 and 2000. The third boom and bust cycle (from 2003 through 2007) came in the wake of the collapse of the Dot-com bubble—leveraged buyouts reach unparalleled size and the institutionalization of private equity firms is exemplified by the Blackstone Group's 2007 initial public offering.

In its early years through roughly the year 2000, the history of the private equity and venture capital asset classes is best described through a narrative of developments in the United States as private equity in Europe consistently lagged behind the North American industry. With the second private equity boom in the mid-1990s and liberalization of regulation for institutional investors in Europe, the emergence of a mature European private equity market has occurred.

Read more about History Of Private Equity And Venture Capital:  Pre-history, Origins of Modern Private Equity, Early Venture Capital and The Growth of Silicon Valley (1959–1981), The First Private Equity Boom (1982–1993), LBO Bust (1990–1992), The Second Private Equity Boom and The Origins of Modern Private Equity, The Bursting of The Internet Bubble and The Private Equity Crash (2000–2003), The Third Private Equity Boom and The Golden Age of Private Equity (2003–2007), The Credit Crunch and Post-modern Private Equity (2007–2008)

Other articles related to "history of private equity and venture capital, private, capital":

History Of Private Equity And Venture Capital - Responses To Private Equity - Contemporary Reflections of Private Equity and Private Equity Controversies
... Over the next few years, attention intensified on private equity as the size of transactions and profile of the companies increased ... the event as follows Schwarzman received a severe backlash from both critics of the private equity industry and fellow investors in private equity ... David Bonderman, the founder of TPG Capital remarked, "We have all wanted to be private – at least until now ...

Famous quotes containing the words history of, capital, venture, history, private and/or equity:

    The second day of July 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated, as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires and illuminations, from one end of this continent to the other, from this time forward forever more
    John Adams (1735–1826)

    Oh, a capital ship for an ocean trip,
    Was the Walloping Window Blind;
    No gale that blew dismayed her crew
    Or troubled the captain’s mind.
    Charles Edward Carryl (1841–1920)

    It is not quite safe to send out a venture in this kind, unless yourself go supercargo. Where a man goes, there he is; but the slightest virtue is immovable,—it is real estate, not personal; who would keep it, must consent to be bought and sold with it.
    Henry David Thoreau (1817–1862)

    Every member of the family of the future will be a producer of some kind and in some degree. The only one who will have the right of exemption will be the mother ...
    Ruth C. D. Havens, U.S. suffragist. As quoted in History of Woman Suffrage, vol. 4, ch. 13, by Susan B. Anthony and Ida Husted Harper (1902)

    The Reverend Samuel Peters ... exaggerated the Blue Laws, but they did include “Capital Lawes” providing a death penalty for any child over sixteen who was found guilty of cursing or striking his natural parents; a death penalty for an incorrigible son; a law forbidding smoking except in a room in a private house; another law declaring smoking illegal except on a journey five miles away from home,...
    —Administration for the State of Con, U.S. public relief program (1935-1943)

    If equity and human natural reason were allowed there would be no law, there would be no lawyers.
    Christina Stead (1902–1983)