Buyout Funds Getting Big — Really Big

Today’s WSJ talks up the latest trend in private equity: giantism

… executives at private-equity funds who once scoffed at the idea of a $10 billion investment fund now say it is only a matter of time. “We would like to do a $10 billion fund,” says Tony James, president of Blackstone Group, which is among the megafunds, a select group of 10 or so $5 billion-plus funds. “We have demonstrated that we can put large amounts of cash to work — and generate bigger returns,” Mr. James says.

Granted, it’s not just the usual priapic “mine is bigger than yours” boy-will-be-boys stuff, there is some logic here:

But this month, [private equity funds] suddenly were sitting on the sidelines as one big corporate-takeover deal after another was announced. Even private-equity funds with billions of dollars in their coffers lacked the muscle to buy Guidant Corp. for $25 billion, as Johnson & Johnson just did, or to pay $13.5 billion for Veritas Software Corp., as Symantec Corp. did in mid-December.