Private Equity
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from the ratings agencies Standard & Poor's Ratings Services and Moody’s Investors Service. This week companies owned by GTCR, Silver Lake, TPG, and Oaktree Capital were downgraded. The debt on Berkshire Partners’ Bare Escentuals, which was recently acquired by Japanese personal care company Shiseido, was upgraded to ‘A’ to match its acquirer’s rating. Company: Graceway Pharmaceuticals Sponsor: GTCR Golder Rauner Action: Moody’s lowered the company’s corporate family rating to Caa3 from Caa1 and the probability of default rating to Caa3 from Caa1. S&P lowered the company’s corporate credit rating to 'B-' from 'B'. Highlight: From Moody’s: “Graceway's Caa3 corporate family rating reflects limited size and scale, significant product concentration risk, and high financial leverage relative to its anticipated earnings base.” From S&P: "The ratings on Graceway reflect the company's limited size, heavy reliance on one niche product, aggressive debt leverage, and looming debt maturities," said Standard & Poor's credit analyst Arthur Wong. These factors partly are offset by the company's currently adequate liquidity.
2 min read · 19 March 2010
Jokes on the Newswire! "Chuck Norris Feeds His Vampire Squid $100 Bills: Mark Gilbert." Mark Gilbert of Bloomberg chimes in on the finance + Chuck Norris meme that was popular a year or so ago. (Bloomberg) Well Well: Women were better traders of stock during the financial crisis than men. (Daily Intel) Spotted: Warren Buffet doing an Axl Rose Imitation for a Geico power ballad. I don't know what else can be said about this, just watch it (below). (Brandfreak, EverythingWarrenBuffet, Time) Less debt, more charm: Private-equity managers face a difficult outlook (Economist) Wise Words: The Best Advice Bill Gross Ever Got. (MarketBeat) Recaps are Back, but Different: The recap in the age of austerity. (The Deal) Opinion: Arthur Delaney says the Dodd bill is soft on private equity and hedge funds. (HuffPo) Returns: Still bad, just, less bad for private equity. (The Globe) Fresh Capital: Yale has increased its allocation to private equity. (Reuters)
1 min read · 18 March 2010
Remember when Calpers released the list of firms which did not voluntarily comply with their placement agent disclosure request? It was a bit scandalous because non-compliance carried the unfortunate connotation that there was something to hide. The list included eight private equity and venture capital firms, which we promptly called, only to learn that most of them had, in fact, complied. It's not clear where the mix-up occurred in every instance, but Calpers has announced that 100% of the firms are now in compliance and have submitted forms detailing their placement agent usage while securing commitments from the pension fund. So the following firms are officially vindicated: EnerTech Capital, Fenway Partners, GTCR, Information Technology Ventures, Markstone Capital, Pinnacle Ventures, Ripplewood and TSG Capital You can download their forms below.
1 min read · 18 March 2010
In a move to clean up private equity's image (and save a little money in the process), The Carlyle Group has followed in KKR's footsteps by partnering with the Environmental Defense Fund. But while KKR's partnership served to "green up" a small handful of its existing portfolio companies, Carlyle has gone even greener. (And right around St. Patty's Day! They're related, right?) The mega-buyout firm, in partnership with the Environmental Defense Fund, will implement something called "Eco ValueScreen." It's a due diligence process that identifies places for improvement as well as that holy grail of "value creation" in acquisition targets, all with the purpose of reducing a company's environmental impact. The screen was developed by Carlyle and EDF alongside environmental consulting firm The Payne Firm. The firms haven't estimated any exact savings figure for Carlyle, but the idea is that the screen goes beyond basic risk mitigation in the diligence process Further, other buyout firms will be able to implement the screen for their own diligence processes.
2 min read · 18 March 2010
Co-Investing with Lady Gaga: Hilco and Gordon Brothers, which bought Polaroid after a dramatic battle with Patriarch Partners, had an unusual coinvestor on the deal by the name of Stefani Germanotta aka, Lady Gaga. (NY Post) KKR to buy Harley? If this rumour is true, I'd like to point out that a Harley take-private would mean private equity is responsible for the loss of yet another awesome stock ticker: HOG. The first, of course, was Apollo's buyout of Cedar Fair (Symbol: FUN.) (Reuters) Great, Great Quote: PR guru Mike Sitrick, the "spin doctor of restructuring," told the FT his clients range from "Thomas H. Lee to Tommy Lee." Awesome. (FT) Via PE Beat. Three Sins Against Innovation: In your enthusiasm to spur innovation, make sure you're not burning those who can provide it best. (Businessweek) Shia LeBeouf: The Wall Street 2 star said: "Wall Street is the most sex-drugs-and-rock-'n'-roll atmosphere that exists on the planet." (Daily Intel) Meanwhile: Paul Farrell says Oliver Stone's upcoming movie is an open of a great market crash in 2010. (MarketWatch)
1 min read · 17 March 2010
Lexington Partners has closed on $3.108 billion in capital commitments toward its seventh fund, according to regulatory filings. The New York-based secondaries firm launched fundraising for Lexington Capital Partners VII LP in early 2008 with a $5 billion target. As of last week, the firm had secured $2.378 billion in commitments from 91 US-based investors and $730.2 million in commitments from 48 overseas investors. Park Hill is serving as placement agent.
1 min read · 17 March 2010
1 min read · 17 March 2010
Flexing: Calpers is looking to flex its power, by removing the limit on the number of shareholder proposals it can issue to companies in its portfolio. (NY Times) What Happens When You Do The Right Thing? You get fired. That's what happened to the Lehman whistleblower at least. (WSJ) Recipe: I have to agree with Tom Davenport's list of Six Ingredients for a Good Online Comment. I'd venture to say any comment that has even two of these six ingredients is a vast improvement over the majority of comments on the internet. (But not peHUB's civilized, intelligent commenters!) (Harvard Business Review) Stay By Stay Home: Out of the maelstrom that is SxSW coverage, I link to a single post: GigaOm's commentary on entrepreneurial stereotypes. (GigaOm) Twitter Royalty: Most Re-tweeted twitters. Way to Go: How the Fed Slept Through Lehman. (Felix Salmon)
1 min read · 16 March 2010
Avista Capital Partners yesterday closed its second fund with $1.8 billion in commitments, after more than 15 months in market, peHUB has learned. Following a first close on around $1 billion in August 2008, Avista basically sat on the sidelines while the financial world -- and PE fundraising environment -- collapsed around it. After gaining a fundraising extension in August 2009, the firm decided to tap the market again with a lowered target of around $2 billion (it had originally sought between $2.5 billion and $3 billion). Thompson Dean, Avista's co-CEO and co-managing partner, said the firm did not lower its target to merely appease LPs, but as a result of the dramatic changes in the market. “It was a reflection of reality,” he explained.
2 min read · 16 March 2010
1 min read · 16 March 2010
