October 2009 Issue

    Month: October
    Year: 2009

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    The new dawn may be a false one

    Some of Asia's key markets appear to be shrugging off the global financial and economic slump with surprising ease. But is this the true picture?

    REGULATION Why single us out?

    Rules governing FDIC-assisted bank buyouts have been softened – but life will still be made tough for GPs by many of the remaining provisions. Jennifer Harris reports

    DEBT FINANCE Where credit is due

    One private bank has identified value in giving GPs money – to spend how they want

    PRIVATISATIONS Governments as vendors

    State assets are on the radar of private equity firms

    INDUSTRY SHAKEOUT Telling it as he sees it

    Never one to hide from controversy, Jon Moulton whipped up a storm on his departure from Alchemy Partners. Was his straight talking justified?

    Why it's time for change

    With the short-term outlook grim for many, it's no coincidence that a number of big players have lost their top dogs to retirement this year

    PUBLIC SERVICE Who is Steve Pagliuca?

    It's a question that Massachusetts voters will answer on 8 December

    FUND TERMS Waterfall wars

    A new guide takes aim at deal-by-deal carry

    In praise of market timing

    Deals born bad are not often saved by operating partners

    The world this month

    The world this month 2009-10-01 Staff Writer MERRILL PLACEMENTS PINOUT Merrill Lynch's private fund placement team is spinning out to launch Mercury Capital Advisors. Michael Ricciardi, Enrique Cuan and Alan Pardee will be Mercury's three managing partners, and are

    50 ways to leave your partners

    50 ways to leave your partners 2009-10-01 Staff Writer Jon Moulton's departure from Alchemy Partners was part of a growing trend of senior professionals heading for the industry's exit door (see p20). Moulton's extraordinary letter to LPs in which he called for Alchemy's portfolio to be wound up and cast asp

    Ultimate violence for bankers

    Ultimate violence for bankers 2009-10-01 Staff Writer Deal professionals are finding ways to sharpen their skill sets in the down market. For what it's worth, Tim Larkin is available to teach them how to kill. The Las Vegas-based martial arts expert is reaching out to financial types w

    Revealed: the private equity psyche test

    Last month a rumour circulated through the market that the California Public Employees' Retirement System would begin requiring GPs to undergo psychological evaluations as part of the due diligence process. CalPERS flatly denied this. However, we very much believe that a test of this nature is needed in the market and therefore propose the following:

    Who's left standing?

    Who's left standing? 2009-10-01 Staff Writer “These were great companies and the buyout would have worked if you were going to continue having EBITDA grow at 10 percent a year, and the markets remaining where they were. The assumptions that were made were ridiculous.” Marc Lasry, head of distressed investmen

    You'll miss me when I'm gone

    Nothing lasts forever – as demonstrated by the recent high-profile departures of a number of private equity veterans. We identify the industry's most eye-catching (people) exits

    The firm that rose from the ashes

    Trilantic Capital Partners, which spun out of bankrupt Lehman Brothers' merchant banking funds, had an uncertain future in the early days after the bankruptcy filing. Working with LPs, the GP found a way through the difficulties. Christopher Witkowsky documents a historic spinout

    Keeping a close watch on GPs

    A pension adviser with some high-profile clients is making sure it makes use of its growing bargaining power

    The threat of undue influence

    Attempts are being made to eliminate political manipulation from the public pension investment process. Recent developments in California make clear why this is a pressing issue – even in the absence of guilt

    Catching some rays

    A mad dash to develop Spanish solar projects has opened a window of opportunity for energy focused GPs

    Awaiting reconstruction

    The long-term fundamentals for private equity in Iberia remain strong. In the short to medium term, however, life will be tough for the region's GPs. Toby Mitchenall and Andy Thomson explore the reasons why

    Waiting for the storm to subside

    Buy-and-build deals offer hope, but 2009 is proving tough for the Swiss mid-market

    The view from Zurich

    Some GPs are still greatly prized by investors, while expectation of out-performance in the coming years is high – despite the pain being felt in the present. Through discussions with leading alternative asset groups in and around Switzerland's financial capital, Andy Thomson takes the temperature of the private equity market

    Playing politics

    Aureos Capital, a private equity firm which invests in small and medium-sized businesses in emerging markets, closed its Aureos Latin America Fund on $184 million in August this year. PEI caught up with the firm's Costa Rica-based regional head Erik Peterson to find out more about the investment climate in a region where the scale of opportunity encourages GPs to find a way round political concerns

    How to reduce costs

    A challenging economic climate calls for innovative ways of producing greater savings and efficiencies within companies. Kevin Ley and Jennifer Harris explore some ways in which private equity firms, with this in mind, are interacting with their portfolios

    Sitting comfortably

    Marc Lasry's $6bn buys senior debt in struggling companies including major LBO deals. This puts his firm, Avenue Capital, in a position to do what many mainstream private equity GPs arguably did not do – namely, invest in good companies at a discount. By Christopher Witkowsky

    INVESTMENT STRATEGY Carlyle's cross-selling coup

    The combination of two Taiwanese companies is explained by the ‘bundling’ trend