Private equity bets on homebuilders

Savvy investors will tell you the time to invest is at the nadir. A whole lot of pros have been burned trying to call the bottom of the real estate crisis, and a whole lot of upstarts who bet correctly--John Paulson comes to mind--have soared to stardom.

So is the private equity industry onto something as it invests in residential homebuilders? They are certainly pouring in. Most developers can't get traditional financing right now. So they are being forced to alternative lenders.

Bloomberg/Business Week reports that private equity managers raised at least $12 billion in 2009 for residential real estate activity. Which isn't much to be sure. But is this the start of something. Angelo Gordon & Co., GoldenTree Asset Management, and JEN Partners have struck deals with developers. The question remains whether the big boys of the industry will jump into the fray. 

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