* Is Fortress Investment Group on the edge of insolvency? * Don't blame CEOs for coveting perks. It's just in their DNA. * Morning Call: U.S. futures point lower, Europe heads higher on pharmas, the Nikkei falls on yen and Hong Kong jumps on China rate cut talk. * I'll be at the Columbia PE/VC Conference this morning, to moderate a panel on the "broken" venture capital model. Too bad I'll need to drive back to Boston before Chris Flowers speaks, although I don't think there will be a lack of other hacks trying to get a piece of him. * New IRS data from 2006 shows that the rich got richer, but paid less.
1 min read · 30 January 2009
Last night I had drinks with a middle-market lender, from one of those firms that still seems to be lending (albeit selectively… very selectively). It was a wide-ranging conversation, but we kept coming back to the paucity of new leveraged buyouts. The conventional culprit here is a lack of credit, but my conversant put forth an alternate theory (at least for the middle markets): Buyers are on strike. There clearly are fewer active lenders than in years past, he said, but there are still enough to handle far more deals than are currently flowing. The real problem is at the buyout firms themselves, which have lost confidence in their own ability to appropriately price and structure transactions.
1 min read · 29 January 2009
2 min read · 29 January 2009
2 min read · 29 January 2009
More live-blogging from the PEA Outlook Conference. This is the secondary market panel. PEA Outlook: Secondary Firm Panel
1 min read · 28 January 2009
It's my turn to take over live-blogging duties at the PEA Outlook Conference, and will begin soon with Pete Lattman's interview of KKR's Scott Nuttall... PEA Outlook: Scott Nuttall of KKR
1 min read · 28 January 2009
Private equity is about to get one of its own inside the Treasury Department. peHUB has learned that Matthew Kabaker has resigned as a managing director with The Blackstone Group, in order to join Tim Geithner and company at 1500 Pennsylvania Ave. No word yet on what Kabaker's official role or title will be, but his past experience with financial institutions would suggest involvement with TARP or a TARP-like program. "We will miss him as a colleague and as a friend," says Blackstone spokesman Peter Rose. "But we are very proud of his move into public service." Kabaker originally joined Blacksone in 1998, and served on the boards of portfolio companies Alliant Insurance, Ariel Re, TRW Automotive, FGIC, HealthMarkets and Michaels Stores. He also was involved in such other transactions as the London International Financial Futures & Options Exchange (LIFFE), Aspen Insurance, Bayview Asset Management, Financial Guaranty Insurance Co.
1 min read · 27 January 2009
VC firms have added lots of job titles over the years, including venture partners, special limited partners and entrepreneurs-in-residence. But quant analysts? That’s one of the positions at Correlation Ventures, a San Diego-based firm that currently is raising its debut fund. Details are sketchy at this point – it’s not talking, natch – but it kind of sounds like a venture index effort. In other words, Correlation has developed an algorithm that would be used to passively invest in venture deals being led by other firms (it’s already “signed” some brand-name partners).
1 min read · 27 January 2009
Earlier today, I posted some S&P data about how leveraged loan defaults are on the rise. It's one of those things that we already knew, but it was nice to have some statistical support. In that same vein, someone just sent over some JPMorgan data showing that private equity distributions fell off a cliff in 2008. It's from the firm's Private Equity Distribution Maangement group, which handles stock distributions for JPMorgan's internal funds-of-funds, plus for 18 outside clients. Seems like a large enough sample to be fairly representative, although I guess it's possible that
1 min read · 26 January 2009
Standard & Poor’s has released new data confirming what we already knew anecdotally: Leveraged loan defaults are on the rise. Like a rocket: “For U.S. leveraged loans, the 12-month-trailing default rate (based on the number of loans) increased to a 57-month high of 4.35% in December from 3.32% in September and 0.26% 12 months earlier, according to Standard & Poor’s Leveraged Commentary and Data group. The leveraged loan default rate has increased markedly and is now above its historical average of 3%. The loan distress ratio—defined as the percent of performing loans trading below 80 cents on the dollar—catapulted up to 87.5% at the end of December from 78.9% in September and 13.4% a year ago.” The report does not estimate 2009 leveraged loan default levels, but does predict that overall default rates will continue to increase. What this basically means
1 min read · 26 January 2009
