Private Equity
Take-Downs: The New York Post puts a hit on Sun Capital Partners. Not once, but twice in one issue. When Wasn't Friendster For Sale? (I mean, ever since the social networking site turned down its first ever buyout offer and realized it wasn't getting another...) Either way, TechCrunch has obtained (perhaps in an attempt by Friendster's I-bankers Morgan Stanley to drum up some bids) Friendster's official marketing materials aimed at potential Asian suitors. (TechCrunch) The New Joblessness: The U.S. economy is not only shedding jobs at a record rate; it is shedding more jobs than it is supposed to. (NYT) Surprise! A buyout firm actually write its portfolio up this quarter! (Reuters) Buffet's Cartoon: The "Secret Millionaires Club" is the title of a new cartoon staring the Oracle of Omaha, in which Buffett's cartoon likeness ... dispenses investment advice to a motley crew of kids from Omaha. (Deal Journal)
1 min read · 27 July 2009
The Audax Group will wait to come to market with its fourth buyout fund, despite several months of pre-marketing, the firm told peHUB. According to Co-CEO Geoff Rehnert, Boston-based Audax made the decision because it hasn’t deployed enough of its current fund to justify raising another. Even after doing ten add-on transactions this year, Fund III is only around 50% deployed. That means the firm is sitting on around $500 million of the $1 billion pool, which closed in 2007. Audax Private Equity invests $10 million to $100 million in transactions valued between $25 million and $500 million. Rehnert wrote in an email: “Last Fall, we anticipated we would be further along investing Fund III at this point in time, but our investment pace has slowed as credit tightened and deal activity has slowed.” The fourth fund is expected to have a similar target to its predecessor.
2 min read · 27 July 2009
A week ago we reported on Boathouse Capital, a new mezzanine fund formed by alumni of American Capital (ACAS). We had very few details except the names of the professionals. Today I learned a little more information from a source. The Wayne, Penn.-based firm is in fundraising mode with a target of somewhere between $75 million and $225 million, based on its intended deal size. After forming last fall and launching fundraising last month, the fund already held a first close on between 65% and 75% of the target amount. Beyond raising capital, the firm hopes to receive SBIC approval to increase its leverage in the fall. Boathouse Capital seeks to invest up to $15 million in sponsor-backed and direct transactions.
2 min read · 27 July 2009
Here’s a look at the past two weeks of scoops, opinions and analysis from the peHUB blogging team. Laundry Room Chronicles: Discussing Blackstone Docs Weekly Downgrade Wrap-Up Midweek M&A Madness Five Things You Need To Know About Debt: Revisited Q&A With HM Capital's Andrew Rosen on Earthbound Farm
2 min read · 25 July 2009
Can't Get Enough CIT Drama? Here's a full recap of the deathwatch. (Clusterstock) Alan Blinder: The U.S. economy appears to be hitting bottom. And that's both good and bad. (NY Times) Proof That Twitter Is A Bunch of Crap? According to the The Poop Index, there are more people talking about pooping on Twitter than world peace, world hunger, or nuclear proliferation. (Gizmodo) Wow: Years after beginning a sale process (we're talking pre-recession people), fashion company Tory Burch sells a stake... to a Mexican firm I've never heard of. (Press release) Poor, Poor Rich People: "As if market forces and malevolent actors weren't enough, the rich are now finding themselves targeted by politicians." (Moneybox)
1 min read · 24 July 2009
We'd hate to let down followers of the Pimco mortgage fund story, so as per usual for the past several quarters, here are the performance numbers on PIMCO Distressed Mortgage Fund I, L.P., a $2.8 billion pool designated to invest in secondary distressed mortgage securities. I'd like to point out first that since our last update of this fund's negative performance, we've learned that Pimco is earning $3 million per quarter to manage the government's commercial paper funding facility (CPFF) program. We've also seen Bill Gross, Pimco's head, come under more criticism for his influence over government policy. On Pimco's mortgage trading activities, he said he "assumes that Pimco traders working on behalf of the government don't talk to their peers trading for Pimco's own accounts, The New York Times reported, adding, "Then again, he said he doesn't know for sure what happens after hours." From the NY Times:
2 min read · 24 July 2009
This week three private-equity-related surveys / studies / white papers / whathaveyous were released and we've got the highlights of each. 1. Navigating Your Portfolio Through Turbulent Waters From Grant Thornton, ACG, and our parent company, Thomson Reuters The study looks at the state of portfolio companies, probably because there aren't any deals to examine. Interesting findings include stats on markdowns, time spent on portfolio companies, and favored strategies for success in the downturn. The white paper also takes a close look at pooled purchasing for health insurance for portfolio companies. -Almost half of all survey respondants said their 1% to 25% of their portfolio companies are in covenant default. The survey concludes with a taste of the obvious: "Now more than ever, most private equity firms have both the knowledge and the time to create real value at the portfolio level.
3 min read · 24 July 2009
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from the agencies, Standard & Poor’s and Moody’s Investor Services. This week the agencies must’ve been busy confusing all of us with changes to their ratings systems (S&P) and finding buyers for Warren Buffet's stake (Moody's) because there’s only one. Either that, or private equity portfolio companies have magically be relieved of their massive debt burden! Ha. What would I write about then? Anyways, the company in the spotlight is Dutch semiconductor company NXP B.V., backed by AlpInvest Partners, Apax Partners, Bain Capital, Kohlberg Kravis Roberts & Co. and Silver Lake. S&P affirmed the company’s long-term corporate credit rating at ‘CCC’. In light of the company’s distressed debt exchange, lowered the ratings on the company's secured and unsecured notes to 'CC' and placed them on CreditWatch negative while affirming the remaining notes at 'B-'. The company plans to undergo a distressed debt exchange on July 23. S&P calculates that the latest exchanges should have a net $26 million negative impact on NXP's cash balances. Since there’s only one, I dug up a little extra info on this company.
2 min read · 24 July 2009
3 min read · 23 July 2009
Buyout Firms Like Old Media? OpenGate Capital (you know, the firm that bought TV Guide without TVGuide.com) is participating in the auction for BusinessWeek (BusinessWeek) Damage Control: Brynnwood Partners and portfolio company Stella D'Oro just wants to say that it is not the evil force behind the conflicts between Stella D'Oro and its union. (Businesswire) FYI: The rotation and orbit of planet Earth is powered by the continuous pronouncement (by private equiteers) that private equity only invests in the best management teams. (Private Equiteer) Studies: Europe doesn't really have a "hotbed of innovation" like Silicon Valley. How is innovation connected to private equity ownership there? (Financierworldwide)
1 min read · 23 July 2009
