First, a brief bit of history. Though operating under a different moniker, Private Equity is actually a hundred year old business. Good old fashioned leveraged buyouts have been a basic tool of entrepreneurship since the early 1900s when folks like J.P. Morgan and The Rockefellers were doing "bootstrap" deals, acquisitions of companies financed largely with bank debt. The business became institutionalized in the 1970s with the growth of good firms like Kohlberg Kravis Roberts, who started out doing $10 million deals. The sector grew dramatically during the '80s, as the "LBO-business" and had its first peak in 1989 with the collapse of Drexel Burnham Lambert.

Continue reading Private equity's real winners -- U.S. retirees and the public markets, for starters

Private equity's real winners -- U.S. retirees and the public markets, for starters originally appeared on BloggingStocks on Mon, 26 Mar 2007 14:46:00 EST. Please see our terms for use of feeds.

Much has been made recently of the problems DaimlerChrysler AG (NYSE:DCX) has with its Chrysler unit and the prospect that the unit may be sold.

There has been speculation that it will end up in the hands of private equity firms. Let's hope so. This may be among the best hopes for our struggling domestic auto industry.

First, some have suggested that the deal is too large for PE firms. This is just not the case. Industry experts peg the value of the deal at $60 billion, about equal to Chrysler's annual revenue.

Continue reading Private equity for Chrysler: Bring it on!

Private equity for Chrysler: Bring it on! originally appeared on BloggingStocks on Sun, 25 Feb 2007 20:45:00 EST. Please see our terms for use of feeds.

This post is written as part of AOL Money & Finance's Best & Worst 2006. You can vote for Donald Trump's hair as the Worst Signature Style.

Good Mr. Trump, he of the fluffy comb-over, had a heck of a year in 2006. We should all be so lucky (he would ascribe luck to none of it, of course, but that is another matter)!

Just a few of his accomplishments:

• The Iconic Donald saw his net worth rise again above a mere five billion dollars.
• He is erecting buildings all over the world, including a Trump Tower in Dubai. The Hair is literally global.
• He married a stunning model, half his age, and fathered a lovely son whom he subtly named Baron. He has stated for the record that he does not and will not change the baby's diapers.
• His television show, The Apprentice, is literally one of the top-rated shows in television. To demonstrate that his Trumpian blood line lives on, he fired his firm professionals from the show and put both of his genetically perfect children on camera alongside him. And they are articulate and on the ball, like pop.
• To put a capper on his TV dominance he put a smack down on his "friend" and Apprentice ingénue, Martha Stewart, when she attempted her own show and talked down the D-man. Nobody does that! Wonder how he handles his enemies when they cross him?

And now, at year end, he is giving foreign-policy style speeches and musing about running for president. And like our current president, the Donald does not drink alcohol. No wonder he is always so crisp.

Continue reading Best & Worst: The Donald as hair icon

Best & Worst: The Donald as hair icon originally appeared on BloggingStocks on Wed, 06 Dec 2006 18:00:00 EST. Please see our terms for use of feeds.

Market observers are always looking for a top. It is that one moment, that one symbolic act, that one windfall beyond belief or act of such stupidity that tells folks that things have gotten as crazy as they are going to get. And it's all downhill from here.

It's the day when irrational exuberance gets drunk on hubris. And a terrible hangover follows.

Well, I have seen the top, and it happened this week.

Was it the announcement that Wall Streeters were going to get $30 billion in bonuses in their Christmas stockings this year? Nope.

Was it the Hertz IPO, you ask, where investors fleeced Ford Motor company (NYSE:F) and made $2 billion in about thirty minutes? No sirree.

Was it Google Inc.(NASDAQ:GOOG) buying YouTube, Inc. for about $10 million dollars per day that the company existed ? Nyet.

Was it the announcement of more than $50 BILLION DOLLARS of deals in one day, which occurred on Monday ? Wrong again!

Continue reading We've reached the market top: Tom Cruise meets private equity

We've reached the market top: Tom Cruise meets private equity originally appeared on BloggingStocks on Tue, 21 Nov 2006 16:35:00 EST. Please see our terms for use of feeds.

As the Private Equity deal juggernaut continues at a record pace, the Justice Department continues to send out letters in their probe of PE competitive behavior. The Wall Street Journal reported today that Merrill Lynch & Co., Inc. (NYSE:MER) has joined this inauspicious list. Other letters in the same form, I am sure, will be received by other players. Any Justice Department investigation is bad news and a distraction, and I am sure there is concern throughout the PE industry.

The question at hand is whether PE firms, in pursuing the "club" deals (many firms getting together to pursue a large target, like a bunch of hunters combining to wrestle an elephant) are "colluding" to bring down prices for the assets they are pursuing, thereby undertaking anti-competitive and thus illegal behavior. The Journal speculates that the Hertz transaction is under particular scrutiny. This was not only a large club deal but one where the buyers made a lot of money VERY quickly. To the Justice Department, I am sure, the fact that big bucks were made in short order MUST mean illegal activity. The Federal Government seems to frown upon large scale success, and therefore must investigate.

I have not seen any of these love letters and can only speculate about the investigation, but the facts of life in Private Equity do not support a case for collusion.

Continue reading More scrutiny for private equity firms

More scrutiny for private equity firms originally appeared on BloggingStocks on Mon, 06 Nov 2006 16:23:00 EST. Please see our terms for use of feeds.

With the annual Federal deficit at around $300 billion, a weekly $1.5 billion cash burn in Iraq, and the National Debt a little north of $7 TRILLION, you would think our trusty lawmakers would be watching OUR pennies.

Instead, they are finding new and creative ways to waste OUR money.

The Washington Post announced this morning that "NASA Invests in Its Future with Venture Capital Firm." In a project that is called "Red Planet" but surely should have been called "Red Ink," the wise folks at NASA have set aside $75 million of your dough to fund projects so "NASA could see a lot of technical innovation" through its direct ownership in technology companies.

This idea is a screaming loser on so many levels it is almost hard to get started.

Continue reading NASA starts venture capital fund! They can't be serious

NASA starts venture capital fund! They can't be serious originally appeared on BloggingStocks on Tue, 31 Oct 2006 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Failing up, large, on Wall Street

Failing up, large, on Wall Street originally appeared on BloggingStocks on Mon, 30 Oct 2006 12:21:00 EST. Please see our terms for use of feeds.

Continue reading Private equity firms hit new funding highs: will anyone be safe?

Private equity firms hit new funding highs: will anyone be safe? originally appeared on BloggingStocks on Thu, 26 Oct 2006 16:59:00 EST. Please see our terms for use of feeds.

In carefully and critically reviewing today's WSJ cover piece (subscription required) on the byzantine process at Goldman Sachs for elevating their big hitters to the level of partner (a.k.a you are now very rich -- WITH status!), I stumbled upon a major insight into the inner workings of the mighty Goldman: They clearly discriminate against people with hair.

I don't actually read any WSJ articles because the print font is so small, but I very much enjoy studying the Journal's little ink-jet photos. As many of you may or may not know, one has not really ARRIVED in the land of heavy hitters until one gets an ink-jet photo in the Journal.

Of ongoing interest are the ones they use of President Bush. When the Journal likes him , they run a powerful, upbeat ink photo that shows gravitas. But when they don't like him, they make his face look kind of scrunched-up and place his eyes too close together. Could it be a strategy on their part?

But I digress...

When doing my review of today's Goldman Sachs article, I noticed that all three of the Goldman Kahunas featured are bald as a cue-ball. Three-for-three!

But this does not a conspiracy make. I only pulled it all together when in my computer-like mind (which only holds pictures), it occurred to me that Hank Paulson is bald too! I immediately called the EEOC to file a claim on behalf of all People of Hair ("POH") as a class action.

I don't know where all this is leading, but I have hired my brother-in-law, a low-level divorce lawyer, to handle the claim. All of you Goldman-partner-wannabe's who have something on their head to put a brush to, should call me right away or rise up in protest on my website: www.goldmandiscriminatesagainstpartnercandidateswithhair.com.

On this news I have also shorted some barber and hair products companies. It is clear to me that since no one with hair will be made partner at Goldman, there will be no rich folks with hair downtown who are able to afford a good haircut. Follow my lead!

Rick Rickertsen is a managing partner at Pine Creek Partners, a Washington, D.C.-based private equity firm, and author of Sell Your Business Your Way. He occasionally writes humor pieces for Blogging Stocks.

Do Goldman Sachs senior partners discriminate against candidates with hair? originally appeared on BloggingStocks on Fri, 13 Oct 2006 16:50:00 EST. Please see our terms for use of feeds.

The NY Times proclaimed on Saturday that the venture capital business is dead, based upon one venture firm going wobbly at the knees. This simply is not true, and other forces are likely at work here.

I just wanted to cry at the sadness I felt for Sevin-Rosen in pulling their tenth fund. This is a venerable old firm, which funded such legendary Silicon Valley founders as Compaq Computer. "The traditional venture model seems to be broken," said partner Steve Dow. Too much money chasing too few deals!! As Claude Rains said in Casablanca, "I'm shocked, SHOCKED I tell you!" to find lots of money pursing good venture investments.

This has been the operative environment since I joined the venture capital business in 1987. It is just a competitive business, folks. Is now and always has been. It is a hard, rigorous, risky business, requiring hard work and harder huevos rancheros.

Continue reading Venture capital dead, says NY Times? We are finished!

Venture capital dead, says NY Times? We are finished! originally appeared on BloggingStocks on Mon, 09 Oct 2006 12:18:00 EST. Please see our terms for use of feeds.