Mid-market lender Madison Capital has laid off 7 employees, or 10% of its staff, Senior Managing Director Chris Williams confirmed to peHUB. The layoffs occurred yesterday on the heels of news that Dymas Capital, another Chicago-based middle market lender, had laid off 10 employees. Six deal pros remain at Dymas. For its part, Madison Capital reduced its headcount to the the same level it had in fiscal 2007, Williams said. "Throughout 2008, we ramped up to meet the activity levels we were experiencing. The first quarter of 2008 was a record time for us. The deal flow has slowed down so we have taken ourselves back a level." The firm now has 55 to 60 people.
1 min read · 22 January 2009
Yesterday I wrote about the AICPA’s recent draft issues paper, which tackles ways for LPs to implement FASB 157. The story highlighted the opinions of a few unnamed LPs, who expressed frustrations with the paper’s guidelines, and several others left lengthy comments. (View that, along with the actual paper, here.) But that’s just one side of the coin. There are others who think these dissenters are just unhappy with mark-to-market in general, and that the ultimate outcome of the paper’s “considerations” would be a positive. In a few quarters, LPs will have more accurate holding values for LP portfolios, they say. One advisor I talked to said that LPs are angry because it means more work for them.
2 min read · 22 January 2009
Five Reasons to Worry About Google: Signs of mortality as the company nears its Q4 earnings report ... (Motley Fool) Presidential Ratings: From Truman to Bush. (WSJ) Combs His Face Backward: Trump could be preparing to file for bankruptcy, a fabulous Chapter 33, Dealbreaker writes. But keeeep attending those "get rich selling real estate" classes, kids. Fabulously I'm sure: Today Bush found out how his stocks and bonds portfolio performed over the last eight years. (Page six) This Is The Dawning Of: A new era for venture capitalism and entrepreneurship? The Deal's Matthew Wurtzel asks. (Dealzone)
1 min read · 21 January 2009
While I’m on the first-time fund beat, I may as well mention Yukon Partners, a new mezzanine fund that’s seeking $300 million for its debut fund, according to a source familiar with the situation. It's being raised by former Norwest Mezzanine partners Michael Hall and William Dietz. peHUB reported their departures were a surprise, but "orderly and amiable" last February. Out of any alternative asset in the market, mezzanine (alongside distressed and energy investors), is most likely to find investors with an appetite.
2 min read · 21 January 2009
A number of buyout pros have shown concern about a draft issues paper the AICPA released this month. The paper provides guidance on how to estimate fair value, particularly in relation to NAV. I combed through it and have to agree with one LP’s assertion that, “The first page or so is all motherhood and apple pie, but by the time you get to the third or fourth page it hardly makes sense…” Of course, I’m not an accountant, but I think the takeaway is worth addressing. More than one PE pro has expressed frustrations to me over the NAV issue. It seems the paper indicates that PE firms should write down a fund if it is trading at a discount in the secondary market, since that is a tangible transaction to go off of. But that doesn’t seem to add up. A saturated, irrational secondary market that’s influenced by LP cash constraints doesn’t necessarily reflect the worth of the underlying assets in PE funds. Just because a desperate LP sells its interest in a fund for 60% of its value, doesn’t mean that fund won’t yield a return. Add that to the fact that not a lot of secondary trades actually come to fruition.
2 min read · 21 January 2009
Guess: Who funded the most expensive inauguration ever? Citigroup, Revlon, D.E. Shaw, and several hedge fund names. (Dealbook) Of Course: Someone will benefit from the Madoff scandal, and it may as well be the journalist who called him out in 2001. She's got a book deal. (Dealzone) Love Him or Hate Him: Timothy Sykes' blog made $83,358 in December. Via Abnormal Returns: Why is it that CEOs take offense at good questions? Partly, because they're encouraged by "hangers on." It's the story of failed CEOs and why capitalism collapsed. (Jeff Matthews)
1 min read · 21 January 2009
Despite the difficulties facing first-time private equity funds in the market, it seems that plenty of ‘em are pushing ahead anyways, for better or for worse. Earlier today peHUB highlighted newcomer TZP Group, a lower-middle market investor named for a biblical reference. But there are many, many other new firms on the block, which I would like to highlight in a handy list. In the past six months, peHUB has reported on the following first-time funds:
2 min read · 20 January 2009
Add one more to the list of first-time funds in the market. TPZ Group, a lower middle-market PE shop focused on business and consumer services companies. The New York-based firm recently made its first investment, sparking speculation that it it had held at least one close (i.e., saving it from fundraising purgatory). As it turns out, a source says that TPZ has held at least two closes toward an undisclosed target for an undisclosed amount. The anchor investor is a large university endowment. The firm's partners declined to comment on any details.
2 min read · 20 January 2009
Not So Vitamin-y: Vitamin Water, which you may remember TSG Consumer Partners made a fortune on, is being sued by health advocacy groups that say Coke (Vitamin Water's parent) is selling "sugar water" and "claiming it has vitamins that boost immunity and reduce risk of disease." But what a great branding strategy. (NY Post) Multi Bylines: Watch out. ABC has launched a special investigation as to what is being done with the billions of taxpayer dollars funneled into TARP. Oh, and they point out that the spokesman for Bank of America has been a jerk. (ABC) Lists: 10 most unethical people in business. Plenty to choose from these days. (Marketwatch via Naked Capitalism) Lifeline to Luxury: NRDC is helping out Lord & Taylor, along the same lines as Leonard Green-backed Neiman Marcus' recent layoff news. Dealzone: Poses a very good question-who is going to buy assets from Citi?
1 min read · 16 January 2009
It's been expected for months, even years now, but it finally happened today. The Star-Tribune filed for Chapter 11. The company has been a bruise on Avista Capital’s portfolio almost since firm plunked down $530 million for it two years ago. peHUB has covered the development, or rather, deterioration, of the investment pretty extensively here, here, here and here. For non-subscribers, the gist of the coverage is that the deal was both a failed investment thesis and foolish capital structure. Avista entered
2 min read · 16 January 2009
