At a Wednesday afternoon panel at The Deal's Fifth Annual Private Capital Symposium, Alan Jones, the co-head of global private equity at Morgan Stanley, discussed the status of the leveraged finance marketplace.
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"The pendulum always swings too far in both directions, but in a historical context it's not so bad," said Jones. "In 2007, the pendulum had swung way too far in one direction. Now, the pendulum its swinging back, but it has to swing back through the normal range."
"You'll see us walk before we can run. It's going to take a while to get back to where we were before 2006. We're still in the crawling phase, and it's going to be a significantly long time before we see deals in the $10 billion to $15 billion size range."
However, on the bright side, Jones said that the current environment is "one of the greatest for putting private equity money to work. Historically, the best returns have come right after a downturn. The returns from the 2006 to 2007 deals probably won't be good, but 2008 to 2009 returns should be very good vintage years for private equity, and it will happen first in the middle market." - George White
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