Private Equity
Election Word Train: A non-stop stream of the moods of NY Times readers, sortable by McCain/Obama. As of 5:50 it seems to be stuck on Excited/Anxious. Data-Mining Is Bad: When its based on presidential elections, according to Paul Kedrosky. "We mine presidential election cycles to come up with historical predictors of which presidential choice will be best for the markets over the next four years, next few months, next ten minutes, etc." But he says, "The empirical issues are myriad." If He Wins: Obama would be the first black President, but he'd also be the first "blue" president- the first "northern, urban liberal to win the presidency since the culture wars broke out in the US in the 1960s," FT writes. HSR And The Candidates: Corporate Dealmaker digs into the antitrust stances of both candidates. Judging by both of their rhetoric, the answers are not surprising, however I'm not sure antitrust law would be either of the President-to-be's priorities. And About That: Obama could tap a former Bush Anti-trust staffer?
2 min read · 04 November 2008
1 min read · 04 November 2008
Busted Auction: Sara Lee decided against selling off its household products businesses. He Said She Said: TechCrunch and VentureBeat square off on whether or not Facebook is desperate for cash. No Regrets: Schwarzman says he wishes his 60th birthday party hadn't become the symbol of the go-go years of private equity. Bruce Wasserstein notes, "It was a great party." Reality TV Meets CNBC: Dealbreaker suggests Charlie Gasparino star in a reality TV show.
2 min read · 03 November 2008
1 min read · 03 November 2008
I recently spoke a mid-market lending source about what (if anything) is going on in the debt world. I walked away with a few themes worth sharing. 1. Sponsors are raising captive mezzanine funds to finance their own deals. It’s a phenomenon I touched on a few months ago when peHUB reported Insight Equity is raising a mezzanine fund alongside its new buyout fund. The firm is requiring a 1:1 commitment to the equity and the mezzanine fund for new LPs. Then, I read that KRG Capital is raising a captive mezz fund as well. And of course ABRY, Summit Partners and TA Associates have been doing it for some time now. There are several arguments regarding this move. For one, with mezzanine so expensive (we’re talking anywhere from 16% to as high as 20%), sponsors are thinking, why give away the upside to someone else? Furthermore, mezzanine is only slightly less risky than equity, so why rely on others to get deals done if we can have no-contingency financing at our fingertips? But as one sponsor told me, “I’ve never in my life had trouble finding mezzanine debt, so why would I want to attempt to arrange it myself for the very first time?” Not to mention, this is essentially doubling your exposure to a deal. All valid points. 2. The ceiling deal value is around $150 million. Most lenders aren’t willing to hold more than
3 min read · 03 November 2008
Happy Halloween! Yes, You: Each taxpayer now has around $1,785.71 of an ownership stake in U.S. banks, including JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, etc. Chuck Haberman says, “as shareholders, we have thoughts on aspects of banking that seem beyond the scope of Messrs. Paulson and Bernanke.” Among his requests? Pens at bank counters that actually work, a moratorium on new bank branches in New York neighborhoods, and end to ATM fees, and an end to bank-sponsored sports stadiums. Still?: October saw the greatest IPO withdrawal rate since 1995. I didn’t know there were any more to withdraw. The total is 30, by the way. I thought we stopped filing those ages ago.
1 min read · 31 October 2008
Christian group 700 Club dubbed Wednesday "Day of Prayer for the World’s Economies," Wonkette reports. Christians descended on Wall Street to touch the financial district bull and pray for money. From the group's website: “We are going to intercede at the site of the statue of the bull on Wall Street to ask God to begin a shift from the bull and bear markets to what we feel will be the 'Lion’s Market,' or God’s control over the economic systems,” (700 Club's Cindy Jacobs) said. “While we do not have the full revelation of all this will entail, we do know that without intercession, economies will crumble.”
1 min read · 31 October 2008
Surprisingly, PE pros were beat out of the biggest breadwinner title by the partners at the big VC firms. The bonuses are lower, but the base is higher. However, this study excludes the likes of Henry Kravis and Steve Schwarzman, since their firms manage more than $5 billion. Click to see the breakdown.
1 min read · 31 October 2008
Uh-Oh: Pension funds are short on dough, too. Doggie Heaven: The guard dog at Lehman Brothers (who was laid off by Barclays) has died. Dealbreaker is auctioning the dog's ID card on ebay. Heller Ehrman No More: The 188-year-old firm will cease to exist on November 28. Stop What You're Doing: And read this assessment of the two actions that companies and firms under peril take: Finger pointing and Frenetic (and unproductive) activity. John Kotter explains why they just don't work, and what to do about it. Hungry For Leverage: Well, maybe not hungry, but Goldman isn't de-levering like everyone else in the country, Dealbook reports.
1 min read · 30 October 2008
It doesn't feel so good to be a banker these days, but damn it feels good to run a portfolio company. CEOs in charge of companies that LBO'd in 2006 took home hefty performance-based salaries in 2007. The biggest breadwinners, including Travelport's Jeff Clarke and GMAC's Eric Feldstein, are listed below. That trend mirrors the compensation of PE pros. Despite taking hits from the credit crunch, PE compensation managed to increase, albeit mildly. Glocap and Thomson Reuters' 2009 Private Equity Compensation Report shows that total cash compensation rose for PE partners around 1% for growth/equity firms, 3% for mega-buyout firms and declined by 2% for firms with less than $300 million AUM. The increases and decreases were echoed at VC firms and funds of funds. But these increases are nothing compared to years past. According to the report's executive summary: Compared to last year when there were cases of double-digit increases at mega-funds, this year there was only one instance (Associates) where compensation rose more than 5%. The other notable change is the increased distribution of carry
2 min read · 30 October 2008
