Private Equity
Here's a look at the last week's worth of scoops, data, and analysis from the peHUB team. Catch up on what you missed before it goes behind our paywall... All First Reads | All Second Opinions Facebook Addiction Up for the Young and Blasé Yale Raises Its Private Equity Allocation, But Not By Choice The Great Financial ‘Purge' Is Over. Bring on the Credit, Please. New Book Demystifies the Cloud Media Vet Scott Marden Rejoins Compass Partners, Plans To Raise $600 Million PE Fund Q&A with Niklas Zennström, On Atomico Fundraise and European Venture Capital Book Interviews Where Does Healthcare Fit in The New Normal? Excelerate Labs: Will it Accelerate Deal Flow in Chicago? M&A Monday VC (and PE) Thoughts on Healthcare Reform Bill Phil Canfield of GTCR on Fund Expiration Dates and the Coming M&A Influx Fun with Filings: Apollo Discloses New Shares & Salaries SpeakerText Founder Matt Mireles on Becoming Famous Overnight, Fundraising, and Why He's Soon Ditching New York for Silicon Valley What Does Healthcare Reform Mean for Healthcare Investing VC-Backed Bust: BioFuelBox Shuts Down
2 min read · 27 March 2010
One Kneejerk Take on the Moody's Report: The private equity industry is getting off easy while it destroys companies and jobs. (CJR) Blow Up Wall Street: A new book argues that the financial empires of Bank of America and JPMorgan must be broken up. (WSJ) Irony: How AIG's Collapse has Paved Wall Street with Gold. (Reuters) Shackin Up: Radio Shack is on the block and seeking private equity suitors. Sale price could be $3 billion. (NY Post) Reconciled Lovers: Spotted! Eric Schmidt and Steve Jobs are buddies again. (Gizmodo)
1 min read · 26 March 2010
Catholic hospital operator Caritas Christi this week agreed to sell itself to Cerberus Capital Management, in a deal Caritas Christi CEO Ralph de la Torre called "good news." Considering Caritas Christi's new owner is named after a three-headed dog from hell, I'm sure the company's 2,000 pensioners, 13,000 employees, and countless patients are praying he's right. In an internal email obtained by peHUB, de la Torre outlined the benefits of the $830 million deal and specific favorable commitments from Cerberus. The deal is a turnaround of the hospital, which has struggled to compete with large teaching hospitals in its region.
3 min read · 26 March 2010
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies by ratings agencies Moody’s Investors Service and Standard & Poor’s. This week, in perhaps a sign of more good things to come, we’ve got three upgrades, to companies owned by SCP Private Equity Partners, Diamond Castle Holdings, and Apollo Management. Gotta love those amend & extends. Another note is that this week we learned from Moody’s that most private equity deals target a B1 rating at completion, which indicates a high leverage tolerance and relatively low default rate. So looking at these companies with the lens of B1 being ideal makes it easier to judge how far gone some of the investments may be. Or, or in the case our three upgrades from this week, of how far they’ve come.
2 min read · 26 March 2010
Haters: Who hates Wall Street the most? It's a regulator show down. (Deal Journal) Market Price: A new restaurant in Grammercy is allowed the prices of its menu items to fluctuate like a stock market. Meaning, a pint of beer starts at $6 but could be pushed to a high of $8 or a low of $4, depending on popularity, Reuters reported. Sounds like a ridiculously dumb gimmick-why would you want to order the least popular item on the menu, no matter how cheap it was? (Reuters) USAAA? How Does Moody's decide on ratings changes? And how would a downgrade of AMERICA work? (Gaurdian) Fabulous: Fast food chains have basically stuck a middle finger up in the direction of healthy eaters, (along with advocates of diabetes, heart disease, obesity etc.). THL is getting in on the action with its latest acquisition of CKE, which has led the charge against health-ing up the image of fast food places in lieu of keeping it fat. (Businessweek)
1 min read · 25 March 2010
2 min read · 25 March 2010
In its latest private equity report, Debevoise & Plimpton addresses taxes on PIK Toggles, defense investing, and IPO disclosures, among many other topics. Here is the editor's letter; download the entire report below. After a very long winter, the private equity industry is poised for a period of renewal. Deal activity is clearly on the uptick, the financing markets are showing signs of activity, the IPO market is no longer in the doldrums and asset allocations to private equity are no longer just a memory. The challenges facing the private equity industry are too numerous to list. In this issue, we suggest ways in which to tackle many of them.
3 min read · 25 March 2010
1 min read · 25 March 2010
Give me a Break: Kindle users are staging an online attack against Michael Lewis's new financial crisis book, giving it one-star reviews on Amazon.com merely because its not available on Kindle. Seriously people? The book's merit is completely unrelated to the way it is delivered. Take it to White Whine. (Gawker) Online Dating is Bigger than Porn? If you believe everything you read on the internet, then yes, it is. (Mashable) Fake Trends: Details on two recent successful fundraisings bring hope to the entire market... (EFinancial news) Strong Buy: This trader recommends Blackstone and Evercore stock based on negative stock spreads. (Seeking Alpha) Listicles: Six things not to do when pitching VCs. (Dividends and Preferences)
1 min read · 24 March 2010
It's nice to have dry powder when so many buyout firms are struggling to raise funds, but there's a danger that comes with hoarding one's capital. Private equity firms have a five-year investment period. If M&A doesn't pick up, and fast, some ‘05 and ‘06 vintage funds may have to give their money back or ask for fund extensions. A smaller fund means lower fees and, for those that associate success with size, a blow to those delicate private equity egos. Earlier this week Phil Canfield of GTCR and I discussed the coming expiration-driven M&A flood. We agreed that we don't expect many private equity firms to willingly part with their capital, and a blogger called Anal_yst wrote a more extensive blog post arguing the point. What that all means is there's about to be a mad rush of buyout pros desperate to "put money to work," however they can (but I'm not talking about your firm, dear reader, you would never do that, just everyone else).
2 min read · 24 March 2010
