The financial services sector is notorious for its many regulations, which has held private equity firms at bay. Things are changing however. With lots of cash at their disposal and pressure to find targets, private equity firms are finding ways to deal with all the rules. New tools include securitization and sponsored spin-offs that can ease the path. For example, to get around the rules that proscribe an entity from owning 10 percent of a bank without registering as one, J.C. Flowers created five separate trusts, each holding under 9.9 percent of the bank--Germany's HSH Nordbank, which has a U.S. branch. J.C. Flowers made sure the trusts had separate limited partners to invest in individual trusts, to ease the concerns of regulators most likely. All this said, I doubt we'll see a buyout of one of the premiere banks anytime soon.

For more:
- read the article from Investment Dealers' Digest (for FierceFinance readers)
- more private equity news