Private Equity
Private equity placement agent Triago today sent out the first edition of a new quarterly newsletter, which includes data on fund valuations and secondary pricing. The most notable stat is that large buyouts are leading the NAV recovery, rising 10.4% in Q4 2009. It was followed by special situations (6.7%), mid-market buyouts (5.7%), energy (1.6%) and venture capital (.06%). If you go back and look at the five quarters ending in Q4 2009 -- including negative results from Q4 08 and Q1 09 -- large buyout NAV is up 12%, while venture capital trails the pack with a positive 3% mark.
2 min read · 09 June 2010
It's been a slow month for VC-backed IPOs, with just three new companies filing and three going public. In fact, only two even bothered to ammend their proposed pricing terms. The newbies were ZipCar, TripeWire and NuPathe, while the recently-listed were Accretive Health, JinkoSolar and TeleNav. That means the VC-backed IPO pipeline remains static with 43 total registrants, but also a bit lighter since the filers are seeking less money than were those that priced. Overall, VC-backed companies in registration to go public are aiming to raise nearly $4.5 billion. The full pipeline is after the jump...
10 min read · 08 June 2010
My weekly video spot for Reuters was about new research showing that the value of global private equity sales has topped the value of private equity purchases so far this year. I'm in New York City for the day, which means my laundry room studio got a breather and I got some make-up (asked for Starchild, but they demurred)...
1 min read · 08 June 2010
The Senate today takes up the carried interest taxation issue, which means it's time for another industry study about how increasing taxes on PE partnerships will cost the nation fortune and jobs (last part emphasized, since the relevant legislative language is part of a jobs bill). This one comes from the Private Equity Council, which argues that each "one percentage point increase in the effective tax rate on private equity investment is associated with a $1.8 billion decline in annual private equity investment." The study (download here) claims to have "detrended" macro-economic changes, in order to make tax rate changes the most significant variable. It also emphasizes that those $1.8 billion decreases are relative to expected private equity ebbs and flows (i.e., it does not necessarily mean that a 1% change today results in a $1.8b decrease from current levels -- but rather a $1.8b decrease from what the level otherwise would be).
3 min read · 08 June 2010
Yesterday I spent some time on the phone with Alex Bangash and Jonathan LaCrosse, who recently launched a new online private equity marketplace called Trusted Insight. The idea is to serve as a sort of LinkedIn for institutional investors, in which they can anonymously offer to buy or sell alternative investment funds and portfolio companies. Here’s how it might work: Imagine I’m an endowment manager looking for some exposure to an early-stage VC fund focused on Brazil. I become a member (after being verified), and type in my parameters. If any such funds are being offered in the system, they will pop up with as much information as the seller wants to disclose. I then “contact” the seller (whose identity I still do not know), who then chooses whether or not to reply (if the seller replies, it would identify itself).
2 min read · 08 June 2010
The value of global private equity sales has topped the value of private equity purchases so far this year, according to data compiled by our Thomson Reuters colleagues. It's the first time that sellside volume ($67.2b) has topped buyside volume ($64.1b) since 1994, and was aided by today's announced $4 billion sale of Talecris Biotherapeutics to Spain-based Grifols. The number of purchases, however, continues to outweigh the number of exits. Overall, both buyside and sellside activity is up in 2010 over last year -- by 132% and 174%, respectively.
1 min read · 07 June 2010
Big news from the LP world, as we’ve learned that the $74 billion Washington State Investment Board has chosen Hamilton Lane as its new private equity consultant. The pension system has around $13.5 billion in private equity assets, and had spent the past five years using Capital Dynamics (which, in turn, had taken over for Pacific Corporate Group).
1 min read · 07 June 2010
People typically react in one of three ways after we publish something they’d rather keep secret: (1) No comment; (2) Confirm and spin; and (3) Deny, deny, deny. But now there is a fourth path: Deny loudly via an official statement to other news outlets (who accept it as gospel), and then admit the truth nearly one year later. The culprit here is Zappos CEO Tony Hsieh. When his company agreed last July to be acquired by Amazon, peHUB reported the following: “The decision to sell hot online shoe retailer Zappos to Amazon.com was more in line with the interests of Sequoia Capital than the company’s CEO, according to two sources close to the company… Moritz and Zappos CEO Tony Hsieh came into conflict about the company’s future. Moritz, the sources say, wanted Zappos to sell while Hsieh wanted to remain independent.” Hsieh responded swiftly with a statement that read, in part:
3 min read · 07 June 2010
* Brad Feld: Venture capital as a produce supplier * Clay Shirkey: Does the Internet make you smarter? * The New York Times fights back against Foursquare and Yelp * Morning Call: U.S. futures point lower, London falls early, European shares retreat and the Nikkei loses nearly 4%. * How pension funds exploit credit default swaps * Today in carried interest: James Robinson says populist blather is approaching high-water mark (remember Jim, I was blathering at the low-water mark) and the Economix blog weighs in. * 10 states with the highest % of residents who work for the government (much more red than blue...) * On Thursday, a Stifel Nicolaus analyst said that American Capital was risking bankruptcy. On Friday, it looked like his note may have changed the company's fortunes.
1 min read · 07 June 2010
General Motors today announced that it is launching a venture capital fund focused on the automotive and transportation sectors, with an initial commitment of $100 million. It will be led by Jon Lauckner, who previously served as GM’s vice president for global product planning. I spent a few minutes on the phone with Lauckner, and learned the following: * The fund will have a fairly broad focus within the transportation framework. This means that it could invest in everything from batteries to biofuels to Bluetooth. * On that last point, Lauckner said: "The envelope of automotive technology is ever-epanding, particularly the area of what we call infotainment. More and more technology is making its way from home and business applications into cars, and drivers want to have that functionality."
1 min read · 04 June 2010
