Another Section 363 purchase-turned-Chapter 22: Fortunoff, the upscale jewelery store, has filed for bankruptcy just 10 months after NRDC Equity Partners purchased it out of bankruptcy. (A few weeks ago the same thing happened to Versa Capital, with portfolio company American Restaurant Group.) Can’t say we didn’t expect it, though. The buyout strategy always seemed like a stretch: NRDC stated it would not close a single Fortunoff store. It also purchased the company for more than $80 million and only put down $10 million in equity. How could that possibly save a retailer that had simply stopped paying its bills and had already exhausted more than one sale-leaseback? Upon closer examination, you have to wonder if it’s a sign of things to come for NRDC’s portfolio. Earlier this week, the Wall Street Journal ran a perplexing story about Richard Baker, the head of NRDC and son of successful real estate investor Robert Baker. The article describes Baker as
3 min read · 05 February 2009
All About the Benjamins: Felix Salmon on why capping Wall Street pay is likely to work. (Market Movers) Some People: Disagree. (NY Times) That Group: Includes Meredith Whitney, who Dealbreaker suggests enter a deathmatch with Pres. Obama. (Dealbreaker)
1 min read · 04 February 2009
I'm confused. I hear all kinds of doom and gloom about how bankrupt companies can't find debtor-in-possession (DIP) financing. They'll be forced into Chapter 7 liquidation! Everybody panic! But then I see stories like this, where lenders insist, "By no means is the DIP market really dead." For example, Kevin Phillips of Bank of America says that putting new money into the DIP market is "exciting" at the moment, Dealscape reports. So what is it? DIP or no DIP? I asked a mid-market lender to clear things up. For starters, there are different approaches to DIP lending. There's defensive lending, which is when you're already exposed
2 min read · 04 February 2009
**Updated with source and spokesperson comments below.** The secondary intermediary field isn't a crowded one. Until recently, your advisory options for unloading LP interests on the secondary market were limited to three established players: Cogent Partners, UBS, and Probitas Partners. It makes sense, since prior to last year, the demand for their services hasn't overwhelmed the market's existing players. But now, with distressed LPs selling at deep discounts, there's a renewed interest in the asset class by anyone and everyone, including, you guessed it, the investment banks.
2 min read · 04 February 2009
10 Questions: To ask your fund of funds manager. (Corgentum) Lucy Kellaway: "I have fallen into recession's web of fear." (FT) Saturday Night Live: Bernie Madoff's Superbowl party. (WSF) And also: Daniel Gross doesn't think Citi should break its Mets contract. (Moneybox) Just Sayin: Don't Seek Exile In B-School (Scottdig)
1 min read · 04 February 2009
New York fund-of-funds manager Siguler Guff is nearing the end of fundraising for two vehicles, according to recent regulatory filings and sources close to the firm. Siguler Guff has accumulated $914.682 million in commitments to its second BRIC fund-of-funds. The vehicle has a $1 billion target, which is a significant increase over its first BRIC fund vehicle. That fund, raised in March 2006, had $610 million in commitments. The fund's strategy is to invest in funds which target Brazil, Russia, India and China, with an emphasis on India and China. Patricia Dinneen, the fund's manager, declined to comment. Meanwhile, Siguler Guff also has secured around $2.3 billion in commitments for its third distressed fund-of-funds, which was being targeted at just $1.5 billion. A final close
1 min read · 03 February 2009
Yucaipa Companies, the investment firm run by supermarket magnate Ron Burkle, is in the market with its second “American Alliance Fund,” according to a regulatory filing. To date, the fund has collected $1.52 billion in commitments. Meanwhile, a parallel fund called “American Alliance Parallel Fund II” has collected $462.5 million. Investors include New York City Employees' Retirement System, Teachers' Retirement System of the City of New York, and California Public Employees' Retirement System. CalPERS committed $400 million.
2 min read · 03 February 2009
Must Read: PE "has yet to acknowledge what many of its investments probably are worth: little or nothing," Barons reports. And it's a good argument-PE pros are talking a lot about the buying opportunities, but how honest are they being about their crappy underwater mega-LBOs? (Baron's) Seriously: Kedrosky calls out CEOs ludicrous $1 dollar salary antics, which he says "mostly reminds employees how crazily overpaid the CEO was in the first place." (Daily Beast) PE Consolidation: Again, I disagree that PE firms will ever consolidate amongst themselves, but others seem to think they will. (FT) Good God: WWD reveals Bank of England's ridiculous dress codes, where female employees are required to wear makeup and heels. (The Cut)
1 min read · 02 February 2009
Updated with comments from Ropes & Gray below. A bill was introduced in the Senate last week that would require hedge funds to register with the SEC. On closer look, we realize it applies to more than just hedge funds, as pointed out by our friends at Ropes and Gray. If passed, the bill also would regulate and require disclosure from all PE and VC funds with $50 million or more in assets. Of course, Schoolhouse Rock has taught us that a bill is just a bill (and not a law). This proposal, introduced by Senators Carl Levin (D – Michigan) and Chuck Grassley (R – Iowa), could go through a lot of changes before it actually gets passed. But as is, it's bad news for those of us who like our private equity private.* It means that buyout funds will have to disclose the names and addresses of all of their investors and the value of the assets in each of their funds. Likewise, the registration would require
3 min read · 02 February 2009
One Down, 11 To Go: January M&A Snapshot from Thomson Reuters. (TR) Equity Private: Contemplates the future of Going Private. It doesn't have a lot of private equity in it. (Going Private) Did You Know? Philip Yea had his footprint on 3i's dismal earnings, but he also has a connection to Investcorp, the firm that got a ratings cut this week and reacted by firing the ratings agent. (Dealscape) Would This Work? Angry senator wants pay cap on Wall Street 'idiots' (CNN)
1 min read · 30 January 2009
