Private Equity
As usual, I have a week’s worth of Moody’s and S&P downgrades on PE-backed companies. Repeat offenders include Apollo Management, KKR, Carlyle Group and Bain Capital. We’ve also got one upgrade, which is Carlyle Group and Fenway Partners’ American Achievement Group. It’s basically an upgrade from the default rating after AAC’s parent company purchased some of its own senior PIK notes at a massive discount. Anyways, on to the list of 16:
6 min read · 06 March 2009
Controversy: Seems last night's Daily Show attack on financial journalists (watch it here) has sparked much debate in the blogosphere. Felix Salmon discusses it here, and I also quite like Dealscape's take, "On Financial Journalism and its Critics," viewable here: (Dealscape) Literally: The sky is falling at AIG, apparently. Photo of the day: (EV Grieve) Speaking of AIG: Our colleagues at Dealzone have outtakes of Congress's grilling of the insurance giant. (AIG) Watch And Learn: According to a new study, watching booze-soaked movies is directly correlated to viewers drinking more. (Reuters)
1 min read · 05 March 2009
2 min read · 05 March 2009
1 min read · 05 March 2009
I was recently informed that in quarters past peHUB has to posted very detailed quarterly charts of M&A data that breaks down private equity activity as a percentage of the total by regions. Apparently that lovely chart, which includes every quarter since 2000, hasn't appeared in this space for three quarters, but by request, we have updated it to include the full year for 2008. Needless to say, PE as a percentage of the total has dropped significantly from '07 levels. As a percentage of total M&A, it's down 69% worldwide and 82% in the US. Total Global M&A was only down 30%; in the US it was down 37%. (I use "only" as a relative term here...) We'll try to keep this data coming at a more consistent and timely pace each quarter. Download the spreadsheet after the jump.
1 min read · 05 March 2009
Last night the Daily Show tore into CNBC after Squawk Box anchor Rick Santelli cancelled a scheduled appearance on the show. Santelli recently gained notoriety for what Stewart called a “cheap populist” outburst opposing bailouts for homeowners. In a segment called “CNBC Gives Financial Advice,” no talking head was safe, as Stewart calls out Jim Cramer, the entire Fast Money crew, Maria Bartiromo, Charlie Gasparino, and others for throwing softballs to CEOS, creating panic in the markets, missing the warning signs of the banking crisis, and being just plain wrong. He ends the rant with the wonderfully evil line, “If only I had followed CNBC’s advice, I’d have a million dollars… provided I had started with a hundred million dollars.” .cc_box a:hover .cc_home{background:url('http://www.comedycentral.com/comedycentral/video/assets/syndicated-logo-over.png') !important;}.cc_links a{color:#b9b9b9;text-decoration:none;}.cc_show a{color:#707070;text-decoration:none;}.cc_title a{color:#868686;text-decoration:none;}.cc_links a:hover{color:#67bee2;text-decoration:underline;}The Daily Show With Jon StewartM - Th 11p / 10cCNBC Gives Financial AdviceDaily Show Full EpisodesImportant Things With Demetri MartinPolitical HumorJoke of the Day
1 min read · 05 March 2009
Ouch: Should Obama reconsider his bullishness? Mean Street calls him the Jeff Immelt of Presidents. (WSJ) Laid off? Worried You Will Be Soon? There are companies for that. Jet Blue, Archstone-Smith and Hyundai are allowing "take-back" clauses if you get laid off after purchasing their products (homes, flights, and cars, respectively). (Cityfile) Private Equity Needs Fixing: According to Bloomberg columnist Matthew Lynn. He goes so far as to suggest a bailout for the Masters of the Universe. John Morris of the Deal says, ‘not so fast,' and I can't help but agree. TALF TALK: Cerberus, Millennium Cpaital, Fortress, and even Blackstone, have expressed interest in TALF. (WSJ)
1 min read · 05 March 2009
Is this a sign of things to come in LP-Land? The State of Indiana has proposed legislation that will merge the administrative functions and advisory boards of Indiana State Teachers Retirement Fund and Indiana Public Employees Retirement Fund. To be clear, they're not merging the funds (so don't be deceived by this Associated Press article). It's a smart move considering the funds have both posted sizable losses this year. It will save $8.9 million in one-time administrative costs and $1.2 million in annual savings. The funds themselves will stay separate, but with one executive director and a single investment board. Right now Terren B. Magid is the executive director of PERF and Steve Russo is the executive director of TRS.
2 min read · 05 March 2009
Secondary deals are basically frozen until year-end numbers come out, which buyers hope will be bad enough to convince sellers of the deep discounts we've been hearing about. While traditional secondary buyers lay in wait, another kind of buyer is stepping in: fund-of-funds managers. I’m told they’re buying what secondary firms refer to as “secondary-lite.” Meaning, they’re buying earlier stage LP interests. (It's like the difference between a pre-owned car and a used one.) Traditional secondary buyers prefer to buy funds that are at least 50% invested to avoid the J-curve. But fund-of-fund investors are now seeing discounted interests in funds they may have wanted a piece of as primary investors, and they’re taking advantage. Since it's earlier stage, they're still investing, mostly, in the track record of the fund's managers, the strategy, and the "possibility," rather than what secondary funds do, which is invest based on the performance of the fund's existing portfolio.
2 min read · 04 March 2009
Girlie Men! Schwartzenegger's take on the economy? Naturally, he says, "Stop Whining!" (PCWorld) Systemic Risk: "In the United States, A.I.G. has more than 375 million policies with a face value of $19 trillion. If policyholders lost faith in A.I.G. and rushed to cash in their policies all at once, the entire insurance industry could falter." (Dealbook) Sign O' The Times: Canaccord Adams has cancelled its "Best Ideas Weekly Newsletter" due to a lack of good ideas. Or something to that effect. (Infectious Greed) Lists: Ten ways to ruin an interview. And no, they aren't "being late." The first five are especially are solid advice. (Yahoo Hotjobs)
1 min read · 03 March 2009
