People have been predicting the return of big private equity deals (private equity news) for a year now. So far, we're still waiting. Really good deals are fewer and farther between--witness the industry's willingness to jump into ever smaller, ever more complicated deals for banks.

The fact is that private equity firms have a lot of dry powder and they're itchy now. They're long on cash and short on deals. And that has made for a very competitive climate. More than a dozen buyout firms made bids for the Virtual Radiologic Corporation; Providence Equity Partners eventually paid a 41 percent premium for the company, notes the New York Times.

We'll likely see more frenzy, which just might reduce returns to investors over the next five to 10 years. Big players like David M. Rubenstein of the Carlyle Group, Henry Kravis of Kohlberg Kravis Roberts and David Bonderman of TPG have more than $10 billion apiece in uncommitted capital (Preqin). Most funds would rather not have to ask their limited partners for more time to invest the money committed in previous years. But good deals are hard to come by. They may have no choice.

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