Private Equity
Law Firms Not Hiring: This fall, law students are competing for half as many openings at big firms as they were last year in what is shaping up to be the most wrenching job search season in over 50 years. (NY Times) But Hedge Funds Are: "As returns have improved and redemptions slowed, some funds have grown confident enough about attractive investment opportunities to take on staff, particularly marketing executives to help lure back assets, operations staff and fund managers in popular strategies." (Reuters) Q&A: AIG's stock shot up today on the Reuters story that the firm's new CEO has reached out to former CEO Hank Greenberg. The three-hour interview with Benmosche is posted: (Reuters) Via Abnormal Returns: Blackstone Group (BX) has become the leading manager of hedge fund of funds. (NY Post)
1 min read · 27 August 2009
Last week marked nine consecutive weeks of IPO filings in the US, and private equity firms are not waiting on the sidelines to get their companies listed. Since the middle of June, 32 companies have filed to take themselves public, including 14 with private equity sponsors. Thus far only Hyatt Hotels, which filed to sell $1.5 billion worth of shares, has topped the $1 billion mark. The private equity-backed deals include:
1 min read · 27 August 2009
Mega-buyout firm Apollo Management has a lesser known BDC outfit called Apollo Investment Corp. (Nasdaq: AINV), which invests in CLOs, sub debt, second lien bank debt and warrants of leveraged buyouts. But the interesting part of Apollo Investment is its co-investments. The firm makes equity investments alongside a number of well-known private equity firms. Because the firm is public, its quarterly report includes a number of not-otherwise disclosed write-downs and write-ups on portfolio companies of firms like GTCR Golder Rauner, Code Hennessy, Wasserstein & Co. and Madison Dearborn Partners. UPDATE: The mark-to-market values which the firm holds its companies at are provided by independent third parties, not the general partners or Apollo itself, a representative for the firm said. Follow the jump to view the second quarter write-downs and write-ups on the 23 LBOs in which AINV has co-invested:
2 min read · 27 August 2009
The big PE news today was obviously the FDIC and private equity's investments in failed banks. You can find our coverage of that here. Fortune's Take on it: Regulators cleaning up after bank failures showed Wednesday how far they're willing to reach out for help. (Fortune) How to Give a Lousy Presentation: Fifteen ways to make a bad impression. Some of these are totally obvious, but number 11 or 9 always seem to get overlooked. (BusinessWeek) Big Questions: What good does private equity do? (My answer: They create value, duh.) (Economist) Results: NB Private Equity earnings rose this quarter. (WSJ) PE Interview: "The era of highly leveraged, high-priced private equity deals is being replaced in Germany by smaller acquisitions focused on long-term growth," according to Lewin Berner. (WSJ)
1 min read · 26 August 2009
Naturally the private equity council watched today's FDIC board meeting (see earlier) with great interest--many of its members have already made bank investments, which may not necessarily be exempt from the new investing rules. The PEC, which represents the 11 largest buyout firms in the US, issued a statement today which expresses continued criticism of the 10% capital requirements for banks under the ownership of private equity firms. The FDIC lowered this requirement from its initial proposal of 15%. The PEC was so critical, in fact, that it pulled out private equity's secret pity weapon, reserved only for the direst of situations--the old "We are do-gooders, we invest public pension money" trick. The FDIC wouldn't really want to impose such harsh requirements on the money managers of retired firefighters and teachers, would it? Well, maybe that wasn't the exact wording. The PEC did express appreciation of the FDIC's six-month review period for the rules. A lot can happen in six months, and perhaps the FDIC will loosen its requirements even more at that time. You can read the PEC's official statement below.
2 min read · 26 August 2009
After passing its revised policy for private equity investment in failed banks this afternoon with a four to one vote, the FDIC has released its full statement on the official policy. You can browse all 39 pages of it below. Here's the summary from the press release: The FDIC Board today adopted a final Statement of Policy on the Acquisition of Failed Insured Depository Institutions. This policy statement provides guidance to investors interested in acquiring or investing in the deposit liabilities of failed banks or thrifts about the standards they will be expected to meet in order to qualify to bid on a failed institution.
2 min read · 26 August 2009
Here are some potential target 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, and send any additions my way. Saxon Oil Company, based in Dallas, has engaged SMH Capital to advise is on evaluating strategic alternatives. (Read More) Essentially Group Ltd, a sports market group based in London, said it was in preliminary talks with a third part over a possible sale of the company. Dow Jones is in the early stages of selling its stock market index business. Goldman Sachs is running the process. Morgan Stanley is considering selling its Van Kampen Investments unit. The company has been approached about a deal. (<a href="http://www.reuters.com/article/innovationNews
2 min read · 26 August 2009
Leverage is Back! Is Warner Chilcott's highly leveraged deal for P&G's pharma business a good thing? (Felix Salmon, Research Recap) More New Lenders: The former head of Carlyle's leveraged finance division is hanging his own shingle. (Bloomberg) IPO Fever Cont... More private companies are going public-and the new companies are outperforming blue chips. (Businessweek) Extra! Extra! The Wall Street Journal is trying too hard to break a big story. (Business Insider) In Defense of the MBA: A University of Washington professor argues that the degree isn't the problem, it's the solution-to poorly run companies, unethical managers, and a crippled economy (BW)
1 min read · 25 August 2009
When comparing this default cycle with default cycles past, once thing is certain: Today's capital structures are a lot more complex. For starters, no one knows who holds what. In the boom era of lending between 2005 and 2007, banks didn't just write a check and wait for the interest to accrue-they syndicated it out through CLOs, which were purchased by hedge funds. When faced with a workout situation, these nontraditional holders are less likely to "take their medicine," as one source put it, by taking a writedown on the company and right-sizing its debt load. They'd rather take control of the company through the bankruptcy courts (a scary practice for many of them which have never acted as operators), or "kick the can down the road," a term that's become popular in recent weeks. Lenders have taken to "kicking the can down the road," or extending debt maturities in exchange for more onerous terms on companies that are struggling to service their crippling debt loads. Some buyout pros believe these "amend and extend" policies are responsible for holding back the tidal wave of bankruptcies that bankruptcy professionals predicted at the beginning of this year. In the firm's Q2 earnings call this month, Blackstone
3 min read · 25 August 2009
UPDATE: The story has been updated to include comment from the firm. Landmark Partners has shelved fundraising efforts for its new hybrid secondaries fund, a source close to the situation said. The Simsbury, Conn.-based secondaries firm launched Hybrid Secondary Fund LP earlier this year to invest in private equity funds which are less than 50% funded. The fund had a $400 million target. Merrill Lynch acted as its placement agent.
2 min read · 25 August 2009
