July 08–Private-equity firms poured more money into New Jersey companies last year, investing $16.7 billion in 104 companies, up $4.1 billion from the previous year.
New Jersey ranked ninth among the states for the amount of private equity invested, according to the Private Equity Growth Capital Council’s annual investment report.
“The rise in private equity investment in New Jersey and nationwide reflects a positive economic climate and the growth of private equity as an industry,” said James Maloney, a spokesman for the private equity council.
Among the most notable private-equity deals in New Jersey last year was a $90 million investment by Goldman Sachs in AvePoint, a Jersey City technology company. In addition, Onex Corp. became an equity partner in York Risk Services Group, a Parsippany-based risk management company, and General Atlantic Partners took a stake in CitiusTech Inc., a Princeton-based health care technology company.
In a more recent deal, Craftmaster Hardware of Northvale, which provides security hardware and locksmith supplies, was purchased this year
for an undisclosed amount by Boston-based private-equity firm Capital Resource Partners.
Private-equity firms invested more than $486 billion in U.S.-based companies last year, increasing investment by $43 billion over the previous year. Nationally, private equity investors put more than half their money into two sectors, business services (29 percent) and consumer goods (22 percent). Information technology, energy, health and financial services accounted for most of the rest of the investments.
California ($56 billion), Texas ($52 billion), New York ($43 billion), Florida ($34 billion) and Illinois ($29 billion) led the |states in the amount of private equity investments.
The private-equity industry in the U.S. is made up of nearly 3,847 investment firms. Private-equity firms invest in or buy companies, often with the aim of turning around a financially ailing company and reselling it. According to the PEGCC, pension funds are the biggest investors in private equity, making up 44 percent of total private equity investment.
Stephen Ellis, an analyst with the investment research firm Morningstar in Chicago, said that private-equity firms currently have a record amount of capital to invest, as investors seek higher returns in a time of low interest rates.
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