Private Equity
1 min read · 03 February 2010
peHUB has covered every nano-development in the fundraising processes of some firms,and Insight Equity and Prophet Equity are two such firms. That's because an interesting narrative emerged from the parallel fundraising efforts. For all the background, you can read here, and here, and here, and here, but the short story is this: Ross Gatlin left Dallas-based turnaround shop Insight Equity as the firm prepared to raise its second fund. He left partly because the firm's terms and fund size were pretty ambitious. Insight had planned to increase its fund size from $300 million to $500 million, while introducing a graduated carry plan that reached 30% for anything above a 4x return, and included a new $250 million mezzanine sidecar fund. Meanwhile, Gatlin launched Prophet Equity and entered the market with a $250 million hard cap, standard carry and a higher than usual GP contribution.
2 min read · 02 February 2010
Happy Groundhog Day! Or rather, not... Dual Track: IPOs become juicy targets for buyout groups (FT) Investigation: Is Peter Orszag's hair really a toupé? (Gawker) Citi Pig at the Bailout Trough: Some pro-Obama groups have really gone after Wall Streeters with their new ads. (HuffPo) Out of Dry Powder? This story argues that private equity firms are not going to do deals because they're out of money! That may be the case for the handful of firms who truly are out of capital and unable to raise ANY more, but actually buyout firms are more flush with cash than ever before, and the problem is that they don't have enough deals (either valuation-wise, or financing wise) to spend it on. I believe the slowdown in the pace of fundraising, is still lower than the slowdown in the pace of deals, not to mention, buyout firms came off a record fundraising year in 2007, and 2008 was only slightly slower ($260 billion in '08, compared with $64 billion in ‘09). (IDD, sub only) Porn at the SEC: More than two dozen employees of the SEC have been investigated over the past two years for viewing porn on their computers at work. (Cityfile)
1 min read · 02 February 2010
Florida-based H.I.G. Ventures is in the market with a new venture capital fund focused exclusively on life sciences companies. The firm had allocated around half of its $300 million second fund to life sciences investing, according to managing director Aaron Davidson, but now feels that the strategy deserves a dedicated vehicle. The fund will focus primarily on companies developing therapeutic drugs or medical devices across sectors and stages, Davidson said. Specifically, “capital efficient businesses with large market opportunities in underserved geographies, and products with shorter development.”
2 min read · 02 February 2010
Here are some potential M&A ideas, rumored or official, to jumpstart your deal pipeline. Our sources are various news reports and the Buyouts "Seeking Buyers" list. For prior lists, see below. IntriCon Corp. (Nasdaq: IIN) plans to divest its non-core electronics business unit, RTI Electronics Inc. The Arden Hills, Minn.-based company's board approved the move to liquidate the assets and expects to complete the sale by mid-year. The maker of body-worn medical and electronic devices will book a charge of $1.4 million to $1.8 million for the divestiture. For the first nine months of 2009, IntriCon's sales fell to $41.5 million from $50.1 million a year earlier. Its RTI Electronics unit generated sales of $4 million for the latest quarter, down about 30 percent from a year earlier. Argyce LLC was seeking a buyer for the drug development program assets of Genaera Corp.
2 min read · 02 February 2010
Cleveland Rocks...? Riverside Co.'s Stewart Kohl in a Q&A in the Plain Dealer on Life in Cleveland, which reminds me of my favorite Youtube spoofs on life in Cleveland, which you may remember was featured in Michael Moore's movie about capitalism. (And I'm going to claim home-state immunity on Cleveland pot shots) (Plain Dealer via WSJ) Persistent Expectations: PE firms are still thinking there will be consolidation. I tend to still disagree... Behind the deal: How cutting prop desks hits M&A (Dealzone) Servicey: Two law firm white papers on PE for ya. (1) Emerging Market Private Equity: How To Find Light At The End Of The Tunnel. (2) Private Equity: Shaken, Not Broken Davos Won't Die: A roundup of what PE dealmakers said at Davos. (DailyFinance) Say What? Current and former C.I.A. agents are using their lie-detecting and interrogation techniques to help Wall Street make money. (Dealbook, also peHUB) Yep: M&A in 2010 won't be a boom (thankfully, I say) but it'll be bumpy. Deals will take longer. (BusinessWeek) Necessary Evil: Saying No Sucks. (Highway 12 Ventures)
1 min read · 01 February 2010
Over the holidays, Dallas-based turnaround shop Prophet Equity held a final close on its debut fund with $250 million in commitments, after 17 months on the road. The effort was oversubscribed, in part, because Prophet stuck militantly to its hard cap figure. Since Prophet will continue to target the same size investments, the firm already has pledged not to increase the size of future funds, either. In addition to the $250 million in capital commitments, the firm’s GPs have committed $25 million to the effort, with the option to raise their commitments to $50 million. I spoke with the firm’s founder, Ross Gatlin, about raising a first-time fund in this market. Gatlin is an alum of Insight Equity, a Texas turnaround shop has also been raising a new fund.
4 min read · 01 February 2010
From last week's Buyouts South conference in Boca Raton, Florida: "You can tell how bad the fundraising market is by looking at the number of ties in this room. When’s the last time you came to a conference in Boca Raton, Florida and saw this many people in suits?” -Christopher Stringer, a managing director with Private Advisors, where he is responsible for private equity manager research, due diligence, selection and monitoring. Stringer was, incidentally, not wearing a tie.
1 min read · 01 February 2010
On a fundraising panel at Buyouts South last week, David Turner, head of Guardian Life Insurance Company of America’s private equity investment practice, commented on what makes or breaks a meeting with general partners. Moderator: What is the most important thing you want to see in an LP meeting? DT: Number one, I care about the culture of the firm. I want to see the character and integrity of the individuals running the firm. It needs to be someone I can see myself being a partner with for ten years. That’s in addition to the inherent capabilities and background that shows you can walk the walk. Which is number two: the GP needs to get granular on deals within the first ten minutes of the meeting. I need to know things like why you chose the companies you chose, and whether you know how to structure a deal properly.
2 min read · 01 February 2010
1 min read · 01 February 2010
