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Return of Private Equity

Shares of Fortress Group and Blackstone surged higher on Tuesday. Why are investors so jazzed about these private equity stocks?

It seems at least some investors are betting that private equity funds will be big players in a partnership with the U.S. government to buy toxic bank assets.

Perhaps they’re taking their cue from KKR, who said the private equity firm would be "happy and willing" to partner with the government if an investment deal to buy assets made sense.

"We think there's a ... role for private equity coming through this situation we're in right now as an economy, and we're very happy and willing to partner with the government where it makes sense," said Dean Nelson, a partner at KKR who runs KKR's Capstone unit in the United States. The unit works on making KKR's portfolio companies more efficient.

The government plan could really fuel some of these private equity stocks, muses Pete Najarian. The same could be true of Goldman Sachs; they could benefit too.

However, it’s worth noting that not every private equity firm shares that view.

Widely followed investor John Canning Jr, chairman of Chicago's Madison Dearborn Partners does not think private equity will be a big player in the Geithner plan. Neither Canning nor his form intend to participate in the plan although he did say distressed bond funds could do well.

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Trader disclosure: On Mar. 24th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (MT), (BAC), (EEM), (FXI), (TTM), (BX); Finerman's Firm Owns (MSFT), (PBR), (RIG); Finerman's Firm Is Short (BBT), (WFC); Finerman's Firm Owns (DNA) Call Spread; Finerman's Firm Owns (WFC) Preferred; Najarian Owns (C) Call Spread; Najarian Owns (AGN) Call Spread; Najarian Owns (AAPL) Call Spread; Najarian Owns (BX) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (GD) Call Spread; Najarian Owns (MS) Call Spread; Najarian Owns (POT) Call Spread; Najarian Owns (PALM) Stock & (PALM) Calls; Najarian Owns (TGT) Call Spread; Najarian Owns (XHB) Call Spread; Najarian Owns (SWY) Calls; Najarian Owns (MSFT) ; Najarian Owns (FIG)