Private equity firms wary of regulations in U.S. bank buyouts

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NEW YORK: Private equity firms are searching for ways to invest in U.S. banks and thrifts while avoiding restrictions that bar owners of these institutions from other businesses.

As bank stocks sink and leveraged buyout deals dry up amid the global credit crunch, private equity firms are considering investments in the financial sector. Financial institutions globally have raised more than $250 billion of capital to offset massive credit losses and are likely to need more.

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Loath to give in to such oversight but attracted to the sector, private equity shops are exploring various deal structures that would allow them to make larger investments in banks and thrifts - and even own some - without the whole firm coming under regulatory purview.

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Private equity firms are looking at buying stakes in banks and thrifts, although they are also talking about working together to buy these institutions in their entirety, said Neil Carragher, managing director at Credit Suisse.

IHT

IF 'we' missed the 'R' bullet, why are the banks targets?