Private equity funds change markets for ECAs

(Bloomberg, New York, 2 July 2007) Private equity capital flows have become huge in international financial markets where ECAs compete. One PE firm alone, Kravis and Roberts, directs an industrial empire that dwarfs some of the world's largest corporations. As of 31 May 2007 KKR had a hand in 36 companies that together generated about $107 billion in revenue in 2006 - more than Coca-Cola, Microsoft and Walt Disney put together. KKR companies employed 560,000 people, more than either Citigroup or General Electric. Together with sovereign wealth funds, PEs have created huge pools of liquidity in financial markets, pushing private capital to accept greater risks in markets traditionally the realm of export credit agencies, forcing them to compete in a race to the bottom which reduces environmental and social standards.