Earlier this afternoon, a hedge fund manager called to tell me that a bunch of PE and hedge honchos recently met with Tim Geithner at Goldman Sachs HQ. Twenty minutes later, he said that Geithner wasn't there. Twenty minutes after that, Charlie Gasparino went on CNBC to report that Goldman Sachs "called a secret meeting to figure out how to fix the problems," and that it was attended by approximately 20 of Goldman's PE and hedge fund clients. And Geithner certainly wasn't there, since the meeting took place just hours after his underwhelming Tuesday speech. Finally, Goldman Sachs itself has chimed in, confirming the meeting but disputing Gasparino's context. In an official statement, the firm said: Contrary to a report on CNBC earlier today, Goldman Sachs did not host "a secret, emergency meeting" to discuss the Treasury Department's Financial Stability Plan on Tuesday. Three weeks ago, we issued a invitation to a large group of our investing clients to discuss market conditions, including a presentation on the macro-economic environment. The fact that the dinner took place on the same day as the Treasury Department's announcement was a coincidence. All of this leads me back to a point I've made endless times this week: Treasury has been negligent in not consulting private equity firms about its public/private partnership plan. I have spoken to senior members of most mega-buyout houses over the past few days, and none has been contacted by Treasury. How is this possible?
2 min read · 12 February 2009
When our email service passed the 50k subscriber mark last week, I mentioned that we had decided to change the name from PE Week Wire to peHUB Wire. The change became effective this morning, and you can subscribe for free by clicking here. On the one hand, this is largely cosmetic. The email’s format and content will remain the same, including my commentary up top and the news items down below. We’re also retaining the same “send from” address, so as not to taunt corporate spam filters. On the other hand, the change is reflective of how these emails have become progressively integrated with this website. I’m fully aware that it can be folly to drop a successful brand-name, but confusion between this publication, peHUB and PE Week (a weekly print newsletter) had become a bit cumbersome. Hopefully this helps clear things up...
1 min read · 12 February 2009
Doug writes: “The question I've wondered about is why aren't PE firms starting de novo banks with their equity like they do in times of distress in the insurance market? Deposits are easy enough to purchase and can be levered quite high (even today under FDIC guidelines), loans can be purchased in the market and returns should be great. This happens with the PE firms coming into in the regulated insurance market after most of the large disasters. I have been told by a few that the problem rests with the FDIC that isn't interested in chartering more banks.”
1 min read · 12 February 2009
Yesterday, a reader named Scott wrote: “You’re spending way too much space on private equity’s role in the bank bailout. It will never be a big part of the PE pie. Let it go.” For starters, Scott clearly doesn’t appreciate how much bloggers value an ongoing story. It means we can build and build on the same initial information, rather than learning a brand new subject each morning. Sure it’s a bit lazy, but it’s also pragmatic. For substance, I’m not so sure Scott is right that bailout-related investment won’t be a big part of overall PE activity. Maybe it wouldn’t be if we using 2007 volume as context, but we’re talking about sleepy 2009
2 min read · 11 February 2009
Wanna be my groupie? If so, you’ll have plenty of opportunity over the next few months, beginning tomorrow in Boston. Here’s my current calendar: ACG DealMakers 2009 Outlook Conference February 12 ● Boston Moderating a panel discussion about the state of private equity and private equity deal-making. This event had around 500 people last year, and we're expecting another packed house. The panelists include Brooke Ablon of Fidelity Equity Partners, Chuck Brizius of THL Partners, Geoffrey Rehnert of Audax Group and Steve Tadler
1 min read · 10 February 2009
Last night, Barack Obama repeatedly declined to discuss the Financial Stability Plan, because he didn’t want to “preempt” this morning’s speech by Tim Geithner. Hey Mr. President, you can’t steal the thunder from someone who’s carrying a transistor radio with one battery missing. For starters, Geithner’s optics were awkward. He spoke with a nervous diction reminiscent of a high schooler who’s been asked to recite a Dickinson poem. Eyes darting all over, with a static emphasis on most every word. Then there was an aborted bow at the end, which he’s probably hoping played more like an effort to bend down to pick up papers. None of that would have mattered, of course, had Geithner provided some actual policy details worth discussing. Instead, he laid out some very broad strokes that anyone with access to the WSJ/NYT/FT/TV/AM/FM already knew.
2 min read · 10 February 2009
We're going to be live-blogging Tim Geithner's 11am press conference, which is expected to lay out a bank bailout plan that will rely, in part, on the participation of private investors. Kind of like Warburg Pincus and Mellon back in the day, but MUCH bigger. Get it after the jump...
1 min read · 10 February 2009
3 min read · 10 February 2009
What follows are ten VC deals culled from recent Regulation D filings with the SEC. They have not been otherwise disclosed: * SolFocus Inc., a Palo Alto, Calif.-based developer of solar concentrator photovoltaic systems, has raised $19.28 million in additional Series C funding, according to a regulatory filing. The round total is now $66.78 million, from firms like Apex Venture Partners, New Enterprise Associates and NGEN Partners. It is unclear if additional capital will be raised, or if the round is closed (it had been targeting between $60m and $70m). SolFocus previously raised nearly $100 million in its Series A and Series B rounds. www.solfocus.com * diaDexus Inc., a South San Francisco-based developer of a blood test for the prediction of cardiovascular disease, has raised around $9.2 million in Series F funding, according to a regulatory filing. Listed shareholders include Scale Venture Partners, GlaxoSmithKline
3 min read · 09 February 2009
Is private equity the new taxpayer? That seems to be the word out of Washington DC, where Tim Geithner tomorrow will introduce the nextest bestest bank bailout plan. Details are still sketchy, but Geithner apparently will propose that the second half of allocated TARP funds be used to buy up so-called “toxic assets” from bank balance sheets. If that sounds familiar, it’s because that’s what the first half of TARP funds was allocated for (before Hank Paulson became a serial freelancer). The difference seems to be that Geithner wants private investors to also chip in, since the price tag will be WAY more than $350 billion. That means private equity, hedge funds and anyone else sitting on a pile of dry powder. The assumption is that such investments would come with major downside protections, as an incentive for investors who, for the most part, have eschewed the opportunity to buy said “toxic assets” on the open market. The obvious question, therefore, is if private equity firms would want any part of this?
2 min read · 09 February 2009
