Tim Collins '78 Sees "Golden Age" Ahead for Private Equity

March 1, 2008

March 1, 2008, Greencastle, Ind. - "Ripplewood Holdings LLC Chief Executive Tim Collins said on Thursday that a golden age of private equity was still to come, with opportunities to be found amid a tough U.S. economy that could fall into recession," begins a Reuters story. Collins, a 1978 graduate of DePauw University, spoke in Munich at the 11th SuperReturn private equity and venture capital conference.

"The golden age is when capital is scarce, courage is scarce and you can use your capital, not only to create extraordinary returns but to play a really important role in this transition period in the economy," Collins stated. "I think it's probably the environment over the next two or three years."

Megan Davies writes, "Collins' view contrasts with those holding that private equity has peaked. The last few years saw a buyout boom that set records for the size and number of mergers, but which came to an abrupt halt in the summer after the subprime loan crisis turmoil. The financing of large leveraged buyouts virtually ended, putting uncompleted deals on shaky ground."

The article notes Ripplewood's transactions, including its investments in Reader's Digest, Advance Auto Parts, Western Multiplex, and Japan's Shinsei Bank.

"Collins said he thought there was a reasonably high probability of a recession, but his real concern was the potential reaction to a serious downturn in the economy and the credit crunch," reports Davies. Collins told the conference, "I'm worried that we're throwing the baby out with the bathwater, that we become so skeptical about markets and market participants that we have destructive regulation. That's a real fear. We haven't seen it happen yet, but there's a lot of rhetoric about it."

Read the complete article at Reuters.com.

Tim Collins also noted that he believes the Federal Reserve is "running out of policy alternatives" as it attempts to keep the U.S. economy out of a deep recession.  That comment and others are included in another story on his address, which was published in the UK's Telegraph.

In November, Collins was honored at The HealthCare Chaplaincy of Manhattan's annual "Wholeness of Life" benefit and awards dinner. He was awarded an honorary Doctor of Humane Letters degree from DePauw on May 22, 2005.

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