Private Equity
Holy Crap: Details on the private equity coup d'état: Dominique Megret, chief executive officer of PAI Partners, France's biggest private-equity firm, was in his office, a 10-minute walk from Paris's Louvre museum, on July 21 when there was a knock on the door. Lionel Zinsou, who joined PAI Partners from Rothschild a year ago, and partners Raffaele Vitale, based in Milan, and Ricardo de Serdio, from Madrid, walked in and said they and three others would resign from the nine-member investment committee unless Megret gave them more power in running the firm, people familiar with the discussions said. The threat infuriated Megret. Read more at Bloomberg. This has happened to me before: Tale of moron PR pitch. (Dealzone) FT Interviews CalPERS: Two stories came from a chat with Leon Shahinian, manager of PE investments at CalPERS. One's on "irony in the brewing tension between investors and private equity firms", and one's on the "battle over fees." Subpeonas: Did Bank of America destroy Countrywide's predator lender phone calls? (WSJ) Vampire: The makers of Twilight are planning to hire Morgan Stanley to advise it on a potential M&A deal. (NY Post)
2 min read · 29 September 2009
2 min read · 29 September 2009
2 min read · 29 September 2009
Distressed investor Wilbur Ross is interested in betting on the casino sector, according to comments made during today's 2009 Reuters' Restructuring Summit. The sector has experienced turmoil in the recession thanks to its high fixed costs of operation and heavy reliance on junk bonds, he said. Ross is focused on possible investments in both U.S.-based and international casinos, and has purchased the debt of some struggling casino operators already. He hinted at a loan-to-own approach to the sector, saying his firm buys debt on the theory that a company will default.
2 min read · 29 September 2009
Why spend time wrestling money away from tight-fisted investors when you're sitting on a pile of your own cash? Lynn Tilton, CEO of distressed investment firm Patriarch Partners, plans to invest a significant amount of her own "Lynn Tilton dollars" into a new bank holding company project, she said at today's Reuters Distressed Summit. The project will take precedent over any fundraising efforts by Patriarch Partners, she said. In June, Tilton told peHUB that the firm's latest fund, Zohar III, was 80% deployed, and that she would likely come to market with a new effort in September. Zohar III is a $1.25 billion pool which closed in 2007.
2 min read · 29 September 2009
It's clear that the world of middle-market lending is in a state of distress. The CLO market doesn't seem ready to return as a source of capital for lenders -- and therefore companies and buyouts -- anytime soon. What's a lender to do? Some players suspect the business model will have to change. Take, for example, Churchill Financial. The middle market lender has remained largely on the sidelines since February of this year, when it laid off several members of its origination team, and several others left voluntarily. Casey Zmijeski turned up at Fifth Street Finance; Timothy Clifford and Sean McKeever started the leveraged lending arm of Amalgamated Bank, called Amalgamated Capital. Churchill's competitors NewStar Financial, Orix Corporation, National City Madison Capital followed suit with headcount reductions. Freeport Financial laid off almost its entire staff as it liquidates assets. Like several of its peers, Churchill has been "stuck in neutral" as an asset manager with little to no new deal activity. But that doesn't mean it has no capital to deploy.
3 min read · 29 September 2009
Blogger with a Bullet: Who is Zero Hedge and how did his financial blog get so influential? NY Mag writes: "The nothing-can-be-believed chaos of the financial crisis created a golden opportunity for a blog run by a mysterious ex-hedge-funder with a dodgy past and conspiracy theories to burn." (New York Magazine) Rational Irrationality: The real reason that capitalism is so crash-prone, by John Cassidy. (New Yorker) Not Everyone's a Bull: "The party is over. The model is broken. Private equity is dead" (Telegraph) About the Only Thing Going on in Secondaries Right Now: Stanford Management Co., which oversees billions of dollars in assets for Stanford University, has tapped Cogent Partners to gauge investor interest for a possible secondary sale of portions of its alternative investment portfolio. (Private Equity Beat) Silent Partner: Deal Journal thinks that Twitter's exclusion of Morgan Stanley from the list of venture capital firms it received funding from is a diss to Wall Street. (Deal Journal) Trading Barbs: Nassim Taleb didn't is not a fan of Ben Bernanke and Tim Geithner. "Bernanke, Geithner and Summers didn't see the crisis coming so why are they still there?" he said, adding. Bernanke is like "a pilot who didn't see a hurricane." (Bloomberg)
2 min read · 28 September 2009
As usual, we have a week’s worth of ratings actions on the debt of sponsor-backed companies via Standard & Poor’s Investors Service and Moody’s Investor Services. Last week was Carlyle Week, with three of the firm’s companies receiving downgrades on their debt ratings. This week it’s Castle Harlan week. Two of the firm’s companies caught the attention of the ratings agencies this week, receiving one downgrade and one upgrade. We’ll call it a break-even. Perkins & Marie Callender's, the company’s struggling restaurant business, saw the ratings on its speculative grade debt downgraded on concerns over the company’s cash flow and borrowing ability. Conversely, Ames True Temper climbed its’s way out of the C’s when S&P upgraded its corporate credit rating to B- on its stable operating performance through the recession. The timing is perfect, considering Castle Harlan's John Castle recently addressed the New York Chamber of Commerce about "Private equity after the world's economic meltdown." We've published the full text of his speech here.
4 min read · 25 September 2009
Oracle of Style: That whole myth about Warren Buffet wearing the same suit his entire life is now debunked. The Oracle is a converted fan of Trands suits made by a Chinese "farmer-turned-fashion mogul" named Li Guilian. (WSJ) Pile on The Fees Bandwagon: After Tuesday's criticism on PE fees from All About Alpha, it's not surprising that more are piling on. Personally I'm all for it, most can agree a number of the "management fees" buyout firms charge to their own companies for taking them private can get out of control. Here's a story on the IPO-ed situations. (Breakingviews) Blackstone wants to buy Seaworld: LolFed is working on an image of Steve Schwarzman riding Shamu ... (LolFed) Encouraging Stats: The number of female MBAs at Wharton is on the rise. (Daily Penn)
2 min read · 25 September 2009
Capitalism: A Love Story: DealBook interviews Michael Moore on his latest movie about Wall Street. (Dealbook) Know These Women: The 25 most powerful women in finance. Representation from private equity (unless any of them work in a buyout-related business within a bank) is nonexistent. (Deal Journal) Monitor to Silver Screen: Justin Timberlake has joined the cast of the upcoming movie about Facebook. (AP) Cadbury: Is the company's CEO asking for a higher bid? Seems to be... (Reuters) Meanwhile a bid deadline may flush out rival bids. (Dealbook) Just for Fun: The Funniest Protest Signs of the Year. (Huffington Post)
1 min read · 23 September 2009
