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Annual McGladrey survey finds private equity groups seeking high-quality companies

As the economy slowly improves, private equity group leaders say they have money to spend and are actively seeking companies to acquire, according to a survey of private equity group leaders rby RSM McGladrey, a leading accounting and consulting firm in the US.

"Just because you have cash in your pocket doesn’t mean you should buy the car on the lot you are told is the best value," says Don Lipari, national executive director of private equity services for RSM McGladrey. "Savvy shoppers have done their research and sought good advice on both price and fit. They truly understand what they’re purchasing and the true costs associated with the purchase."

While buyers abound, many high-quality companies are waiting for the economic tide to turn and holding out for better offers, according to the study, which polled 75 senior executives who lead private equity groups investing in the middle market.

The Boy Scout motto, "be prepared" was a theme echoed by many respondents. While they might currently have more capital than a year ago, private equity practitioners have grown more cautious.

"Prospective buyers are swarming quality sellers," says Hector Cuellar, president of McGladrey Capital Markets. "Private equity firms have their checkbooks out. They were previously anxious to find bargains – now they just want to deploy their assets as best they can since there is such a lack of quality deals."

The Private Equity survey was conducted on behalf of McGladrey by mergermarket. View the complete results of the 2011 Managing Portfolio Investments Survey.

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