Private Equity
Secondary intermediary Probitas Partners confirmed it is in discussions to create a liquidity vehicle that pairs sovereign wealth fund money with cash-strapped LPs. The vehicle, called Prospective, aims to bridge the pricing disparity between sellers and buyers of secondary limited partnership stakes by splitting the commitment. Prospective will separate LP stakes into funded and unfunded portions. The buyer—a SWF, potentially—agrees to fund future capital calls, and the seller—the current LP stakeholder—can still participate in the upside of its invested capital without taking a loss on the deeply discounted secondary market.
2 min read · 19 March 2009
Speechless: CNBC suggests we declare War on Greed because declaring war on an idea worked for the War on Terror. This is a joke right? I mean, the satire is apparent on way too many levels. Right? (Via Dealbreaker.) Gag Order: Christopher Fountain writes: "Just about a year ago I was fired from the Greenwich Post after the manager of their biggest advertiser, Coldwell Banker Greenwich, threatened to pull their advertising if I wasn't yanked." What was he fired for? Commenting on the large debt load the company's LBO backer, Apollo Management, had piled on the company. (For What it's Worth) Seachange: In yet another way PE firms will be doing more to please LPs, Business Standard reports that hurdle rates will likely rise. (Business Standard) Kudlow and Welch: Last night's interview outtakes. (Kudlow's Money Politic$)
1 min read · 18 March 2009
West Hill Partners has ended 18 months of fundraising for what would have been its debut vehicle, according to an LP source. The firm failed to approach its $500 million goal, leading its existing investors to terminate their commitments. West Hill Partners, based in Boston, was founded in mid-2007 by alums of buyout firm J.W. Childs. The firm had secured commitments from Ontario Municipal Employees Retirement System and Adams Street, among others. OMERS had committed $75 million, a source said. The total amount raised was $120 million, according to
2 min read · 18 March 2009
Yesterday was the first subscription day for interested TALF participants, but due to a seeming lack of preparation and time on both sides, it was extended until tomorrow. Is two days going to make much of a difference? Probably not. Notably, it's not for a lack of interest. The most vocal example is PE pro Wilbur Ross, who expressed his desire to get a piece of the TALF action last week. From what I hear, there are plenty of others in the alternative asset community and elsewhere. At issue is the timing.
2 min read · 18 March 2009
A year into this economic mess and the recessionary PR pitch is already a cliche: “It’s the recession, and everything is bad, but my client is the one person/group/firm to defy all odds.” It got so bad that in December we even wrote a story asking for no more “The Middle Market is Still Strong” pitches (mostly because it is not). But today’s laughs in the face of redundant, irrelevant news stories. Before I reveal it, I should mention that
2 min read · 18 March 2009
So: While Goldman Sach's PE fund is finding new ways to call capital (ie, debt investments), the firm is lending to its individual employees that cannot meet those calls. (NY Times) Unintended Consequences: How the distressed auto industry has affected two high tech buyouts. (Marketwatch) Riiight: Luxury goods makers are attempting to make buyers of fake Prada feel guilty (because they think soccer moms are going to spring for a $12K purse out of guilt?) (City Room) Banks Are Like Smokers: In case you missed the 60 minutes interview, this blog highlights one of the best/more troublesome metaphors. (ScottDig)
1 min read · 17 March 2009
GS Capital Partners is making a plea to its LPs, and it doesn’t have the support of the largest one—itself. GSCP, a private equity arm of Goldman Sachs, is seeking approval from 50% of its investors to use money from its buyout fund to purchase distressed debt. But a whopping $9 billion of the firm’s $20 billion sixth fund came from Goldman Sachs itself -- including contributions from employees -- and those stakeholders do not get to vote on matters such as strategy change, according to the LP agreement.
1 min read · 17 March 2009
2 min read · 17 March 2009
Culled from SEC Filings, these fundraising updates have not been otherwise disclosed: CIVC Capital seeks $575 million for its third fund, with a hard cap of $700 million. The fund, called CIVC Partners Fund IV, was formed in May of 2008. CIVC Capital’s prior fund had $650 million in commitments and closed in 2003. The fund hired UBS as a placement agent in 2008. CIVC is based in Chicago and invests equity slices of between $15 million and $85 million in business services, financial services, marketing and information services companies. Wind Point Partners has raised at least $842 million in commitments toward its seventh fund. The fund, which has a target of $1.15 billion, according to regulatory filings, has at least 43 investors. The firm was slated to hold a first close on greater than $700 million, which is greater than its entire sixth fund, around this time last year. Wind Point is based in Southfield, Mich. and 60% of the firm’s deals are add-ons.
2 min read · 17 March 2009
peHUB recently laid out a number of options for investing in the very cheap secondary market, including large dedicated funds raising new pools of capital and publicly-traded funds-of-funds like Conversus Capital. Today we present one more form of secondary investing—the direct secondary. Naturally, that includes the kind of sponsor-to-sponsor deals that some LPs frown upon, but there are several firms whose entire strategy involves taking direct minority investments off PE investors hands. They call this practice “direct secondary” investing. I spoke with David Wachter, a managing director and founding partner of W Capital, one such firm based in New York. The firm is currently investing from its second fund, a $700 million pool of capital which closed $200 million above target in March 2008. Other players in the market include Vision Capital in the UK and Goldman Sachs’ secondaries fund.
3 min read · 16 March 2009
