Venture capital firms staged a comeback in the fourth quarter of 2009, unloading some $7.3 billion in portfolio companies, mostly to corporate acquirers. Forty-four percent of 2009’s total liquidity was generated in the fourth quarter, according to data from Dow Jones VentureSource.
The bulk of this activity was generated by corporate mergers and acquisitions, with only $220 raised through initial public offerings (IPOs). Still, it represents a 49 percent increase in activity from the same period last year.
“The fourth quarter has set the stage for an active year in M&As in 2010,” said Jessica Canning, director of global research for Dow Jones VentureSource. “As the economy improves, acquirers are gaining confidence in their own financial situation and returning to strategic acquisitions. At the same time, the steady trickle of public offerings is teasing investors who expect the IPO window will re-open in the coming year.”
It remains to be seen whether this loosening of the taps will also spur an increase in hedge fund job hiring. One would think that improved liquidity and a shortening of the time it takes to find an exit through a merger or acquisition – or increasingly through an IPO – would encourage hedge fund partners to cautiously look for new talent.
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