Private Equity
Renny Smith, a former pro with THL Partners, has launched a growth equity firm focused on business services investments. It's called Staley Capital, and last fall began raising its debut fund with a $100 million target. A first close is expected later this quarter, according to a source.
1 min read · 05 January 2010
2 min read · 05 January 2010
Private Equity's Year in the Spotlight: "Once a quarter, we're the only ones in our underwear," Blackstone once said of its public reporting. But not for long. Other firms are on the verge of catching up. (WSJ) The neverending debate: There's a new white paper in town debating the good and evil of private equity called Leveraged Buyouts and Private Equity. Tom Taulli dissects it. (Daily Finance) Taking a Stand: The Boston Globe has officially opposed supported taxing carried interest as capital gains for private equity firms. (Boston Globe) Podcasts: For your commute, here are two podcasts from law firm Duane Morris on tax law and deal-doing. (Duane Morris) Justice Served: Did you know Thomas H. Lee had a stalker? Who has been trying to extort money from him? Who he paid more than 200k for therapy for? Well, now she's on probation. (FINS)
1 min read · 04 January 2010
Clayton Dubilier & Rice has closed its eighth fund with $5 billion in capital commitments, according to a source familiar with the situation. An announcement is expected shortly. The New York-based firm originally began fundraising almost two years ago with listed hard cap of $7.5 billion, after having raised $4 billion for its seventh fund in 2006. CD&R is one of those in-between-sized firms that tends to fly below the radar. With a $5 billion fund, it isn’t quite a mega-firm, but it’s not middle-market either. The firm typically does just one deal per year, which makes 2009 a big one for CD&R. Last year CD&R closed three deals, all paid for by its new fund.
3 min read · 04 January 2010
It's been really slow going, but I've finally made my way through Andrew Ross Sorkin's crisis opus, "Too Big Too Fail." I blame my snail's reading pace on the fact that, at 2.5 pounds, the book is simply too heavy to carry around. Private equity's direct role in the great crisis of September 2008 was minimal, yet somehow Blackstone Group's Steve Schwarzman proved that once again, the truth is far more amazing than anything I could make up. You may remember his calm, collected public comments on the crisis at a conference days after Lehman collapsed. At the time I wrote that Steve Schwarzman Is Not Freaking Out, noting he seemed "almost too relaxed." That was, apparently, not the case.
2 min read · 04 January 2010
Despite a slight increase in fourth quarter deal activity, private equity deals in 2009 fell to a level not seen since 2002. By value, PE deals fell by 43% year-over-year, from $236 billion in 2008 to $134 billion this year. Volume fell as well: Last year buyout firms did 3,951 deals; in 2009 just 2,611 closed. But (But!), there’s hope. Large deals picked up in the fourth quarter, with deal value jumping from $39 billion in Q3 to $48 billion. (And that’s more than double the total value in Q4 of last year, where just $22 billion worth of deals were completed.) That figure indicates an increase in large deals because volume actually dropped in the fourth quarter, from 702 deals in the third quarter to 677 deals in the fourth quarter. You can download a spreadsheet with Thomson Reuters deal data, including worldwide M&A, going back to 2002, below.
1 min read · 04 January 2010
By the middle of the year, we were on pace to double last year's number of LBO-backed busts. June's LBO-backed bankruptcy list boasted 46 Chapter 11s; last year's total was 49. But then the pace slowed down, companies found ways to avoid the courts and the list finished the year with 74 total bankruptcies. That's far more than 2008's total (and blows 2007's grand total of two out of the water), but it isn't nearly as high as expected. We can attribute the slowdown to a little thing called Amend & Extend (or, as Mark Patterson of MatlinPatterson called it, "Amend, Extend and Pretend"). Midway through the year, lenders realized they couldn't be complete jerks about their loans if they didn't want a tsunami of bankruptcy cases on their hands, so they relented, allowing sponsors and their companies to "kick the can down the road" (another buzzy phrase of the year) and extend debt maturities. Whether or not that solution will prove to save all the overlevered companies out there has yet to be seen, but for 2009, it was a saving grace. Download the entire spreadsheet after the jump:
2 min read · 31 December 2009
Happy New Year, Everyone-will return on Monday. Standing Out: How to Get Noticed by Executive Recruiters, a service piece. (FINS) Ageism: A banker who was fired at age 42 has won an age discrimination case against CIBC in Canada. (Times Online) Biggest Buzzword of '09? Ponzi. In 2009 we saw almost four times as many investment scams fall apart as in 2008. (AP) Deals Deals Deals: Hopu Investment Management Co., the China-focused fund backed by Singapore's Temasek Holdings Pte, bought at least $400 million of stock in China Pacific Insurance (Group) Co., Bloomberg reported. (Bloomberg) Ugly Jumble: "Now journalism is a jumble. Just who is a reporter and who is an advocate is often blurred. Some journalism is openly partisan." (Newsweek) Get Ready for a Dealmaking Upswing in 2010: Companies looking to fix strategic flaws or simply to grow are turning again to M&A, says Bloomberg BusinessWeek columnist Frank Aquila (BW)
1 min read · 30 December 2009
In 2008, credit froze up but we still had lots of leftover boom-era fun to ogle at. The first half of the year saw plenty of MAC drama from mega-buyouts gone bad, and the second half, well you know what happened then. But in 2009 what did we get? Frozen credit, frozen deal-doing, frozen fundraising, a pile of never-ending pay-to-play crap, and an even bigger pile of hopeful, optimistic punditry. YAWN! So here’s hoping 2010 will be rife with heated M&A auctions, warmer fundraising markets, IPOs-a-blazing, the end of pay-to-play, and realistic punditry. Cheers! Capping off our year-end series, we asked PE pros for some reflections on 2009 and predictions for 2010. Here are some of their answers. For more year-end reflection, go here. To chime in, GPs can send responses here.
5 min read · 30 December 2009
The following six fundraising updates have been culled from SEC filings: Oaktree Capital has raised $425.8 million to invest in mortgage-backed securities through the government's PPIP plan. The fund, called Oaktree PPIP Private Fund, L.P., has 39 investors, which includes Arctic Slope PPIP Private Fund GP, L.P., a contractor which represents the Alaska Native Arctic Slope Inupiat. The $425.8 million likely includes capital raised for a parallel offshore fund called Oaktree PPIP Private Fund (Cayman), L.P., which accumulated $181 million in commitments, according to a separate SEC filing. This one has been reported already, but in case you missed it: Littlejohn & Co. has held a second close on its fourth fund with $616.5 million in commitments. The firm is using Park Hill as a placement agent. The firm held a first close in September with around $400 million. The fund has a curious target figure of $1,323,529,412, which some reports have said is a hard cap while the actual target is $1.25 billion. If the target is reached, the fund would be a significant jump for Littlejohn & Co., which is coming off of an $850 million third fund. That vehicle initially had only $650 million in commitments, but raised an additional $200 million in 2006. According to information from Oregon Public Employee's Retirement Fund, Littlejohn Fund II has returned 1.48x its money.
2 min read · 30 December 2009
