Side Letter: Inside Dyal’s NBA play, Minnesota RFP, EBITDAC? EBIT-don’t.

Inside intel on Dyal's basketball play and the reaction to EBITDAC. Here’s today's brief, for our valued subscribers only.

They said it

“Another case of buyer’s remorse.”

That’s how the lawyer for AmEx Global Business Travel investors including Qatar Investment Authority and Certares Management described the scrapped deal with Carlyle Group and GIC. Carlyle said the pandemic triggered a material adverse event clause allowing the firm to cancel its investment in the company. Carlyle and GIC may, however, walk away from the deal due to a technicality. Juweel Investors, a Certares entity, failed to persuade the Delaware Chancery Court to set a late June trial date. Without a trial by end June, financing of the deal will collapse. The $1.5 billion stock-purchase would have valued the company at $5 billion. Subscribers to sister title PE Hub can read the full story here.

Just happened

Dropping dimes with the NBA

On Tuesday we mentioned Dyal Capital Partners’ tie-up with the National Basketball Association to raise capital to take minority stakes in NBA franchises. We’ve since learned a few things about the strategy from sources familiar with the matter:

  • Dyal will aim to raise a permanent capital fund between $1 billion and $2 billion for the strategy, which will invest separate to its flagship vehicles.
  • The size of the fund could increase to buy additional teams.
  • Dyal’s existing senior team will lead the effort and plans to recruit additional people with NBA expertise.
  • The fund will aim for a net IRR in the mid-teens.
  • It will hold stakes in around five to eight NBA teams at first and could grow this to a maximum of 15.

PE individuals owning stakes in sports franchises is nothing new: the Detroit Pistons, Atlanta Hawks and Philadelphia 76ers are all owned by industry execs. Links to the PE world will no doubt make it easier for the Neuberger unit to source and close its deals.

“The right institutional buyer is professional and has done this before, has a very long horizon, believes in the structural growth in the league and more or less is going to stay out of the way of the majority owner. We believe that firmly in our other business,” Dyal head Michael Rees told Side Letter, declining to comment on specifics of the strategy. One source we spoke to palmed Dyal’s latest play off as simple asset gathering. Still, with minority owners seeking liquidity and single teams fetching as much as $4.6 billion, Dyal is positioning itself for the rebound.

EBITDAC? EBIT-don’t, say lenders

Blackstone-owned German measuring instrument manufacturer Schenk Process has used “adjusted EBIDTAC” in its quarterly report – yes, the “C” stands for “coronavirus” – to “add back” €5.4 million of profits it claims it would have made were it not for the pandemic, prompting the European Leveraged Finance Association to issue a warning to others thinking of doing the same. ELFA is concerned using EBITDAC will allow companies to incur indebtedness against backward-looking metrics and “wind up with more leverage against an uncertain post-covid level of forward earnings and cashflow”. Need additional liquidity? Try negotiating waivers to existing terms from current creditors.


Help wanted. Minnesota State Board of Investment, which has been investing in alternatives for more than 40 years, is seeking one or more consultants to help develop and execute investment strategy across its $20 billion private markets portfolio. Generalists and asset-class specialists are equally welcome to submit for the five-year contracts, the winners of which will be decided in the autumn. RFP here.

Dig deeper

Institution: Cathay Life Insurance
Headquarters: Taipei, Taiwan
AUM: NT$6.21trn
Bitesize: $50m-$100m

Cathay Life Insurance has agreed to commit $100 million to Silver Lake Partners VI. The fund is seeking to raise more than $16 billion.

As illustrated below, Cathay Life Insurance’s recent private equity commitments have focused on buyouts and secondaries funds.

For more information on Cathay Life, as well as more than 5,900 other institutions, check out the PEI database.

We would love your feedback to help us make this newsletter more useful; click here to give us your opinion.

Today’s letter was prepared by Toby MitchenallIsobel Markham, Adam Le, Rod James, Carmela Mendoza and Jordan Stutts.

Subscribe now and get Side Letter delivered to your inbox each day

To find out how, email, or call our team:

London: +44 207 566 5432
New York: +1 646 545 6296
Hong Kong: +852 2153 3140