Private Equity
If you’re not calling your fund top quartile, you aren’t fudging the numbers enough. According to a study picked up by Private Equity Online, 77% of funds could claim their performance places them in the top 25% of private equity funds. If the math on that sounds a little screwy, that’s because it is. According to data from Peracs, 77% of private equity funds can claim top-quartile status if they manipulate their vintage year when applying it to benchmark data. So the funds aren’t lying about their performance. They’re just manipulating the benchmark criteria. Meaning, anyone who doesn’t say they’re in the top quartile must really be in that bottom 23%. Either way, as we’re reminded once again, it’s a meaningless term. So can we finally agree to stop bragging about “top quartile” funds now?
1 min read · 11 August 2009
2 min read · 11 August 2009
Our weekly downgrade list may have to change its name. According to an encouraging report from debt ratings agency Standard & Poors, upgrades are on the up and up. Titled “Upgrade Potential Across Credit Grades and Sectors,” the report states the the number of issuers poised for upgrade increased last month to 157, up from its five-year low of 136 in March. That number is still lower than the trailing twelve-month average. The number of issuers poised for downgrade shrunk slightly to 965, down from 992 in the prior month and down from the all-time peak of 1,028 in April.
2 min read · 11 August 2009
Throwdown! Investment banks aren't happy that firms like Apollo and KKR are stepping into their territory with their investment advisory services. (FT) When Is the Last Time You Heard an Entrepreneur Say This? "I receive a seemingly endless stream of calls from VCs and private equity firms eager to hand over some of their money," he said. (FT) Retail Therapy: Barney's, backed by Istithmar, is in a little trouble. The firm hired Perella Weinberg Partners to help it restructure its debt. Wonder what this means for Istithmar's other retail businesses (Loehmann's comes to mind) and other struggling PE-backed luxury retailers like Neiman Marcus (Leonard Green) and Lord & Taylor (NRDC)... (NY Post) News Lite: There's an event called Fashion Meets Finance, which, as the NY Times nicely puts it, "shamelessly" attempts to pair women in fashion with men in finance. And that event organization has declared the recession over. Not a self-serving declaration at all, eh guys? (NY Times) News Heavy: Is it now a crime to be poor? (Barbara Ehrenreich)
2 min read · 10 August 2009
3 min read · 10 August 2009
Here's a look at the past two weeks of scoops, opinions and analysis from the peHUB blogging team. SEC Publishes Proposed Placement Agent Rules Still No PPIP Transparency from Treasury Commenters to SEC: We Don't Like Your Stinkin' Rules PE/VC Pros Escape House Compensation Limits KKR's Prudent IPO Preparation Two More IPO Candidates KKR Has La Vida Loca, Blackstone Has The Pussycat Dolls? KKR/Fidelity IPO Deal Not for The Great Unwashed The Ancestry of Ancestry.com: It's Not a VC-Backed IPO Laundry Room Chronicles: Avago Set To Go IPO Why Did Nelson Peltz's Public Debt Fund Fail (And Will THL's Do the Same)? Bojangles Refinancing Banks on Old Connections Who's Filling The Senior Loan Void? It's Your Friendly Regional Bank Disastrous ACAS Earnings Won't Help Lender Negotiations Quote of the Day: Rewriting Mega-LBO History Blackstone Group Keeps Rising Ahead of Earnings "We're a Big Mid-Market Fund" and Other Head-Scratchers From the Blackstone's Earnings Call Deal Scoop: Roark Capital Nears Investment In Fla. Trash Collector
2 min read · 08 August 2009
How Many Times Have You Heard This? "We're a good company with a bad balance sheet?" Daniel Gross thinks that excuse is lame with a capital "L." (Slate) Why a Hyatt IPO Now? The Chicago Tribune reports that family politics are likely driving the move to take the Berkshire Hathaway-backed company public. (Chicago Tribune) TXU Trouble: A group of lenders to the energy giant formerly known as TXU are resisting efforts by the company to amend its loan agreements, according to Dealbook. Oh, Rich Man Follies: Will Guy Hands get away with his tax haven? (NY Times)
2 min read · 07 August 2009
UPDATE: This story has been updated to reflect comments from the firm and fundraising details. The absence of senior debt from the market has clearly driven the year's decline in M&A. But middle market buyout shops are finding new places to obtain financing for their deals. One we outlined earlier this week is regional banks. Another is new pools of capital. A perfect example is Chatham Capital, a mezzanine investor located in Atlanta, Georgia. The firm typically invests between $2 million and $60 million worth of capital in sub-debt, but according to a source, the firm started a separate "one-stop" fund with capabilities for both senior debt and mezzanine lending. The fund seeks mezzanine-like returns, and is willing to hold up to $30 million to $40 million of debt on its books without the need for syndication, the source said. Chatham has gathered 380 million for this “one-stop” strategy and is raising more.
3 min read · 07 August 2009
Per usual, we have a week’s worth of ratings actions on LBO-backed companies from ratings agencies Standard & Poor’s and Moody’s Investor Services. It’s the third light collection in a row — the past two weeks have only see ratings actions on five companies total; this week there are three. Company: Energy Future Holdings Corp. Sponsor: GS Capital, KKR, Morgan Stanley Private Equity, TPG, Citigroup Private Equity are sponsors. Ratings Action: Moody's downgraded the company's corporate family rating and probability of default rating to Caa1 from B3. Highlights: The rating action reflects the rating agency's view that the capital structure is untenable and will likely prompt the company to pursue some form of restructuring activity. "EFH's longer-term fundamentals remain weak. Fundamental concerns include: the magnitude of its debt ($44 billion) and significant looming maturities in 2014 (approximately $23 billion)."
2 min read · 07 August 2009
More IPO Madness: TPG may be eying an IPO of Myer department stores in Australia. (FT) Deal Trends: It's a buyers market. Carried Interest blog has some thoughts on how that's affecting M&A transactions. (Carried Interest) Wondering What Was Up With Twitter Today? Apparently the social networking site, alongside Facebook and Livejournal, were hacked. (WSJ) Remember the Men of the Financial Crisis? Meet the ladies. (Clusterstock) Good Money After Bad? Oak Hill is shelling out more capital toward Duane Reade. Bad idea? Some investors think so... (NY Post)
1 min read · 06 August 2009
