Loose Change - April 9, 2007

Oh, so that's how they do it... In The Blackstone Group's S-1 filing with the Securities and Exchange Commission, the private equity heavyweight spells out how a leveraged buyout works. Explaining that private equity funds typically borrow most of the purchase price of a company, Blackstone lets the reader in on a little trade secret: "A significant reason why many private equity funds may deliver superior returns on equity relative to traditional equity investments is the benefit of leverage." Great. Now everyone is going to be doing it.