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Private equity firms on a tear
Report: Buyout firms have inked 330 deals this year, worth $74.1B, their highest level since 2000.
November 11, 2005: 12:40 PM EST

NEW YORK (CNN/Money) - Private equity firms are snatching up publicly traded companies at their fastest pace in years, according to a news report published Friday.

Looking at data, USA Today reported that buyout firms such as Blackstone Group and Apollo Management, who respectively acquired La Quinta and Linen 'n Things earlier this week, have completed 330 deals this year, worth $74.1 billion.

The last time private equity firms were this active was in 2000, the paper reported, when 346 deals were made.

Sitting on estimated $1 trillion in investment funds and bolstered by low interest rates, buyout firms have targeted publicly traded companies, feeling that they can be run more effectively if taken private, according to the paper. Once private, the companies do not face such high regulatory costs and are not bound by shareholder demands.

Some industry experts warned that this buyout pace can't be sustained, because investors in these firms might be equally served investing in publicly traded stock, the paper reported.

Other critics pointed out to the paper that a lot of these private equity firms are overpaying for these acquisitions.

"They have a lot of money to invest," Ken Heebner, portfolio manager at CGM Capital Development told USA Today. "There's the risk that there's too much money."

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