Bear Growth Capital Partners has finally found a new home, nearly eight months after being orphaned by the collapse of Bear Stearns. Well, at least its portfolio companies have. peHUB has learned that CCMP Capital recently agreed to manage the legacy investments of Bear Growth Capital Partners, a mid-market group launched by Bear Stearns in 2003 to invest in companies valued at between $10 million and $100 million. No specific details of the transfer have been disclosed, although Bear Growth Capital senior managing director Joe Scharfenberger is now working out of CCMP’s offices and has a CCMP email. Fellow senior managing director Paul Lattanzio did not make the move, and sources say that most group members other than Scharfenberger have been laid off.
2 min read · 15 December 2008
The sky is blue, Apollo Management has agreed to pay Huntsman Corp. $1 billion (it could have been worse) and in one week I’ll be on a plane to Costa Rica. In other words, it’s time for some Monday Mouth-Off. *** First up is Mr. X, regarding my comment that a recent move by Permira could be the beginning of buyout fund size cuts: “If I’m reading that right, that’s not cutting the fund. That’s taking advantage of your LPs who are capital constrained. If my funds with portfolios acquired at 10x EBITDA tried that, I’d tell them to off.” Albert adds: “Permira should be ashamed of itself for abusing a loyal LP in this manner.” I agree with both comments, and should have done a better job reading the (not so) fine print. *** SH on layoffs at The Carlyle Group: “This strikes me as horribly misaligned with LPs, unless there is a corresponding cut in mgt fees or a reduction/release of fund committed capital. Generally speaking, how can firms
2 min read · 15 December 2008
* Huntsman v. Hexion is finally over, with Hexion owner Apollo Management agreeing to pay around $1 billion in total penalties (some of which involve the purchase of Huntsman convertible securities). Add to this whatever Apollo shelled out in legal fees, and it's a disastrous deal. Only way it could have been worse were if Huntsman had refused to settle, and taken Apollo for billions in court. * The Private Equity Council this morning released a new study on how the U.S. can maintain its "global economic leadership." Not PE-specific, although there is some stuff about enabling private investment in infrastructure. Here's the full report. * Morning Call: U.S. futures point lower, FTSE up a bit at mid-day, other European shares also rise, Nikkei and Hong Kong both up. * VC-backed companies assume that once they've raised money at a certain valuation, that's that. But BitTorrent is learning a different lesson, after it's investors insisted on renegotiating both the dollar amount and valuation of a recent "$17 million" round.
2 min read · 15 December 2008
Greetings from Hotel Crescent Court in Dallas -- one of the nicest establishments in which my corporate overlords have voluntarily boarded me. A bunch of quick hits before I catch a flight back to the Bay State. *** Just asking: Secondary private equity firms are licking their lips over the discounted assets in market, but aren’t many of those same firms in hot water for assets they bought in 2006 and early 2007? A source told me over dinner last night (steak - how deliciously stereotypically Dallas) that secondary firms were, on average, still paying premiums until around Q2 of last year. That means they’ve got lots of stuff on their books that today they wouldn’t touch anywhere north of 60 or 70 cents on the dollar. If you’re a secondary firm that blew through cash in 2006 and 2007, that’s got to be some heavy baggage. *** Speaking of secondaries, I heard the following anecdote from someone
3 min read · 12 December 2008
Earlier this week, I suggested that public pension systems could become embroiled in bonus battles that would play out on the front pages. At issue would be managers who get cut checks for beating market benchmarks, even if both the benchmarks and their individual performance are underwater. Well, it seems that such a situation has already occurred. A helpful reader points us to this story from South Carolina, where the state retirement system owed chief investment officer Bob Borden a $176,000 bonus for performance relating to the fiscal year ending June 30. South Carolina Treasurer Converse Chellis moved to block the payment, arguing that it was inappropriate given state budget cuts and state worker furloughs. Chellis took his fight to the system's investment commission
1 min read · 11 December 2008
3 min read · 11 December 2008
* RIP BCE: The mega-buyout binge of '06-'07 is finally over. * BreakingViews: "Apollo and Cerberus may need help from the god of hopeless causes." * Spam returns to American dinner tables. * Morning Call: U.S. futures point lower, Europe down on finance and mining, Nikkei keeps rising and Hong Kong up slightly. * Banks keep trying to game the system, and the system keeps giving them ways to do it. * Heidi catches up with the AIG and Lehman asset sales. * Ritholtz vs. Chris Cox.
1 min read · 11 December 2008
Apologies for my light posting today, but I've got to catch a flight for Dallas, where tomorrow we're holding our first-ever Buyouts Texas event. It begins at 8am at the Crescent Court Hotel, with a mid-market outlook specific to the Lone Star State. We've also got a dealflow circuit, and keynotes from Saul Meyer of Aldus Equity and Peter Brodsky of HM Capital Partners. My job is to moderate a pair of panels. First up are a group of limited partners, talking about everything from denominator effects to PE firms layoffs to what (if anything) firms can do to raise a first-time fund. My other one is about energy deal-making, which is appropriate given the locale. We'll talk oil prices, Obama energy policy, TXU and why so many U.S. energy investment firms seem to believe geographic diversity is having one office in Dallas and another in Houston.
1 min read · 10 December 2008
1 min read · 09 December 2008
2 min read · 09 December 2008
