BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Opportunistic Real Estate Buying By Private Equity Poised to Pop in 2010]]>http://www.bloggingstocks.com/2010/02/22/opportunistic-real-estate-privtate-equity-poised-to-pop-in-2010/http://www.bloggingstocks.com/2010/02/22/opportunistic-real-estate-privtate-equity-poised-to-pop-in-2010/http://www.bloggingstocks.com/2010/02/22/opportunistic-real-estate-privtate-equity-poised-to-pop-in-2010/#commentsFiled under:

Look for fund-raising by opportunistic private equity real estate funds to pick up this year. According to private equity research firm Preqin, 182 opportunistic vehicles are out there trying to raise money right now, with a target of $95 billion.

To put this objective in perspective, 2009 was dismal, with only 59 opportunistic real estate funds pulling in $26 billion in fresh capital. The sector was far more successful in 2008, however, raising $84 billion across 84 funds and making it the sector's best year for fund-raising. So, if the 2010 funds reach their goal, it will have overcome the woes of last year and even top the one before.

Continue reading Opportunistic Real Estate Buying By Private Equity Poised to Pop in 2010

Opportunistic Real Estate Buying By Private Equity Poised to Pop in 2010 originally appeared on BloggingStocks on Mon, 22 Feb 2010 10:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>PreqinPrivate equityPrivateEquityreal estateRealEstateMon, 22 Feb 2010 10:40:00 EST<![CDATA[Private Equity Tax Could Have Unintended Consequences]]>http://www.bloggingstocks.com/2010/02/08/private-equity-tax-could-have-unintended-consequences/http://www.bloggingstocks.com/2010/02/08/private-equity-tax-could-have-unintended-consequences/http://www.bloggingstocks.com/2010/02/08/private-equity-tax-could-have-unintended-consequences/#commentsFiled under:

The federal government needs cash, and we all know it has to come from somewhere. As no politician has ever been criticized (at least not broadly) for going after the folks with the deepest pockets, private equity industry needs to dig in for what could become a fierce battle over new taxes.

The issue isn't new. For a while now, the feds have been kicking around new taxes on private equity firms based on how profits are classified. Yet, this search for cash could have unintended consequences, as the definitions used could wind up taxing venture capital funds and small partnerships, which could be the keys to an economic recovery. Critics argue that the tax may not bring in as much money as the government hopes.

Continue reading Private Equity Tax Could Have Unintended Consequences

Private Equity Tax Could Have Unintended Consequences originally appeared on BloggingStocks on Mon, 08 Feb 2010 10:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>carried interestCarriedInterestinthenewsprivate equityPrivateEquitytaxesventure capitalVentureCapitalMon, 08 Feb 2010 10:30:00 EST<![CDATA[Blackstone's Graham Packaging Goes for an IPO]]>http://www.bloggingstocks.com/2009/12/24/blackstones-graham-packaging-goes-for-an-ipo/http://www.bloggingstocks.com/2009/12/24/blackstones-graham-packaging-goes-for-an-ipo/http://www.bloggingstocks.com/2009/12/24/blackstones-graham-packaging-goes-for-an-ipo/#commentsFiled under:

With assets of over $96 billion, the Blackstone Group (BX) needs to get liquid on many deals to generate competitive returns for its investors. This means being aggressive with IPOs. In fact, it looks like 2010 will be fairly active for the private-equity powerhouse.

The latest deal from Blackstone? Well, this week the firm put together an IPO filing for Graham Packaging Co. The estimated size of the proposed deal is $350 million.

Continue reading Blackstone's Graham Packaging Goes for an IPO

Blackstone's Graham Packaging Goes for an IPO originally appeared on BloggingStocks on Thu, 24 Dec 2009 09:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>featuredGraham Packaging CoGrahamPackagingCoIPOsPrivate equityPrivateEquityThu, 24 Dec 2009 09:00:00 EST<![CDATA[KKR guns for a military deal -- buys Northrop Grumman's TASC]]>http://www.bloggingstocks.com/2009/11/09/kkr-guns-for-a-military-deal-buys-northrop-grummans-tasc/http://www.bloggingstocks.com/2009/11/09/kkr-guns-for-a-military-deal-buys-northrop-grummans-tasc/http://www.bloggingstocks.com/2009/11/09/kkr-guns-for-a-military-deal-buys-northrop-grummans-tasc/#commentsFiled under: , ,

Could it be that private-equity buyouts are making a comeback? There are certainly signs of a return. Just last week, TPG and the Canada Pension Plan agreed to shell out $4 billion for IMS Health (RX).

This week, we have another interesting deal: KKR and General Atlantic will buy TASC for $1.65 billion. TASC is the consulting unit of Northrop Grumman (NOC).

Actually, the military giant had little choice but to unload the division because of a conflict of interest. How can you provide unbiased consulting to the U.S. government as well as sell weapons to it?

Continue reading KKR guns for a military deal -- buys Northrop Grumman's TASC

KKR guns for a military deal -- buys Northrop Grumman's TASC originally appeared on BloggingStocks on Mon, 09 Nov 2009 08:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>featuredKKRnocprivate equityPrivateEquitytascMon, 09 Nov 2009 08:20:00 EST<![CDATA[Doomsday Scenario: Credit card problems, PE downsized, American workers lag]]>http://www.bloggingstocks.com/2009/06/15/doomsday-scenario-credit-card-problems-pe-downsized-american/http://www.bloggingstocks.com/2009/06/15/doomsday-scenario-credit-card-problems-pe-downsized-american/http://www.bloggingstocks.com/2009/06/15/doomsday-scenario-credit-card-problems-pe-downsized-american/#commentsFiled under: , , ,

Not a good day for those looking for green shoots with markets down strongly. And no wonder. Credit card problems with the U.S. consumer are off the hook as CapitalOne (NYSE: COF) charge-offs rose to their highest historical level of 9.91% (via ZeroHedge) and American Express (NYSE: AXP) rose to 10% (via Mish Shedlock).

Higher chargeoffs and retracting credit means further consumer spending retraction. A semi-annual survey by Collier Capital found that 20% of institutional investors plan to downsize their target allocation to private equity, (via PEHub) the largest negative response since the survey started in 2004. An article by two Harvard University economists found that the biggest reason for the growing income inequality is lagging educational improvement in the American workforce (via VoxEU). There is no quick fix for this so its fairly bad news (although better than blaming the inequality on globalization and some neo-capitalist cabal).

Alex Salkever is Director of Research at Piqqem.com, a stock analysis site powered by the Wisdom of Crowds.

Doomsday Scenario: Credit card problems, PE downsized, American workers lag originally appeared on BloggingStocks on Mon, 15 Jun 2009 17:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>CapitalOnecreditcredit cardsCreditCardsincome gapIncomeGapprivate equityPrivateEquityMon, 15 Jun 2009 17:00:00 EST<![CDATA[KKR gets some juice from the Oracle/Sun deal]]>http://www.bloggingstocks.com/2009/04/21/kkr-gets-some-juice-from-the-oracle-sun-deal/http://www.bloggingstocks.com/2009/04/21/kkr-gets-some-juice-from-the-oracle-sun-deal/http://www.bloggingstocks.com/2009/04/21/kkr-gets-some-juice-from-the-oracle-sun-deal/#commentsFiled under: , ,

Back in early 2007, KKR Private Equity Investors -- along with Citigroup (NYSE: C) -- invested $700 million in Sun Microsystems (NASDAQ: JAVA). The investment structure was a convertible senior note (both firms split the investment).

And, just like many other private equity deals, KKR wrote down the investment -- by about $167 million. This was as of last year.

Well, in light of Oracle's (NASDAQ: ORCL) announced $7.4 billion buyout of Sun yesterday, there is a nice surprise for KKR. You see, according to the note agreement, KKR is entitled to get its investment repaid. In fact, this also includes payment of accrued interest, according to Reuters.

Continue reading KKR gets some juice from the Oracle/Sun deal

KKR gets some juice from the Oracle/Sun deal originally appeared on BloggingStocks on Tue, 21 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>inthenewsjavaKKRorclprivate equityPrivateEquityTue, 21 Apr 2009 09:30:00 EST<![CDATA[Stila Cosmetics sold again to another private equity firm]]>http://www.bloggingstocks.com/2009/04/20/stila-cosmetics-sold-again-to-another-private-equity-firm/http://www.bloggingstocks.com/2009/04/20/stila-cosmetics-sold-again-to-another-private-equity-firm/http://www.bloggingstocks.com/2009/04/20/stila-cosmetics-sold-again-to-another-private-equity-firm/#commentsFiled under: , ,

Just as foreclosures account for a record share of the real estate market, foreclosed companies are also one of the few areas of activity in the private equity space.

Sun Capital Partners took Stila Cosmetics private back in 2006, but defaulted on loans from Wachovia and CIT Group (NYSE: CIT) -- leading those lenders to foreclose on the company.

Now Stila has been sold to New York private equity firm Patriarch Partners for an undisclosed sum sure to be considerably lower than what Sun Capital paid when it bought the brand from Estee Lauder (NYSE: EL), which originally purchased the company from founder Jeanine Lobell back in 1999.

Continue reading Stila Cosmetics sold again to another private equity firm

Stila Cosmetics sold again to another private equity firm originally appeared on BloggingStocks on Mon, 20 Apr 2009 14:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>DealsPrivate EquityPrivateEquityStila CosmeticsStilaCosmeticsMon, 20 Apr 2009 14:30:00 EST<![CDATA[Private Equity: Plenty of powder or getting plowed?]]>http://www.bloggingstocks.com/2009/03/25/private-equtity-plenty-of-powder-or-getting-plowed/http://www.bloggingstocks.com/2009/03/25/private-equtity-plenty-of-powder-or-getting-plowed/http://www.bloggingstocks.com/2009/03/25/private-equtity-plenty-of-powder-or-getting-plowed/#commentsFiled under: , , ,

Quadrangle Group, a powerful investment bank and private equity player headed by Steven Rattner (the on-again, off-again Car Czar for the Obama team), has stopped trying to raise money for it's new private equity fund, according to PE Hub. Private equity has certainly gotten a bad rap of late, with many market seers claiming that the whole PE industry was headed for a giant blowup.

The percentage of deals done by private equity shops fell by over 50% in 2008. Many of the university endowments and state and municipal pension funds that had been key patrons of PE fundraisers are now so far underwater that they can't even conceive of coughing up cash for PE, let alone explaining why they are reserving money for an asset class that looked incredibly toxic in 2008. Certainly, the PE sector will bounce back because every single pension and endowment fund manager will chase the highest returns, even if there is no strong statistical research that PE profers higher returns (or even any returns) over time.

Alex Salkever is Director of Research at Piqqem.com, a stock research community powered by the Wisdom of Crowds.

Private Equity: Plenty of powder or getting plowed? originally appeared on BloggingStocks on Wed, 25 Mar 2009 15:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>fundraisinginthenewprivate equityPrivateEquityquadranglegroupRattnerWed, 25 Mar 2009 15:40:00 EST<![CDATA[Can private equity work without the leverage?]]>http://www.bloggingstocks.com/2009/03/12/can-private-equity-work-without-the-leverage/http://www.bloggingstocks.com/2009/03/12/can-private-equity-work-without-the-leverage/http://www.bloggingstocks.com/2009/03/12/can-private-equity-work-without-the-leverage/#commentsFiled under: ,

The credit crunch has pretty much brought the private equity industry to a halt: Without access to cheap, readily available, debt with liberal terms, the leveraged buyout shops lack the paper they need to get the deals done.

But the Wall Street Journal reports (subscription required) that some firms are now trying "equity buyouts" or EBOs -- deals that involve taking companies private without the use of debt. With companies available as cheap as they are now, some titans are betting that they can earn excellent returns without the leverage the has historically led to outsized profits.

Continue reading Can private equity work without the leverage?

Can private equity work without the leverage? originally appeared on BloggingStocks on Thu, 12 Mar 2009 14:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>DebtEBOequity buyoutsEquityBuyoutsinthenewsLeveragePrivate EquityPrivateEquityThu, 12 Mar 2009 14:00:00 EST<![CDATA[Apollo Management plows more into Realogy]]>http://www.bloggingstocks.com/2009/03/11/apollo-management-plows-more-into-realogy/http://www.bloggingstocks.com/2009/03/11/apollo-management-plows-more-into-realogy/http://www.bloggingstocks.com/2009/03/11/apollo-management-plows-more-into-realogy/#commentsFiled under:

Apollo Management acquired Realogy -- the parent company of real estate brokerages like Century 21 and Coldwell Banker -- at precisely the top of the real estate bubble.

So far the results have been about what you might expect. Now Apollo is pumping another $150 million in (subscription required) to keep the deal afloat through 2009. The company says that combined with the big cost cuts it's implemented over the past three years will be enough to save the company. Investors disagree, with some of the bonds trading for as little as 11.5 cents on the dollar suggesting a high probability of bankruptcy.

Continue reading Apollo Management plows more into Realogy

Apollo Management plows more into Realogy originally appeared on BloggingStocks on Wed, 11 Mar 2009 13:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Apollo GroupApolloGroupPrivate EquityPrivateEquityRealogyWed, 11 Mar 2009 13:00:00 EST<![CDATA[TPG foregoes deal with foreigners]]>http://www.bloggingstocks.com/2009/02/04/tpg-foregoes-deal-with-foreigners/http://www.bloggingstocks.com/2009/02/04/tpg-foregoes-deal-with-foreigners/http://www.bloggingstocks.com/2009/02/04/tpg-foregoes-deal-with-foreigners/#commentsFiled under:

Not long ago, institutions and sovereign wealth funds salivated over the opportunity to invest in private equity operations. But, as seen by the lowly stock prices of the Blackstone Group LLP (NYSE: BX) and Fortress Investment Group (NYSE: FIG), things are much gloomier now.

Interestingly enough, TPG has spent some time trying to drum up interest in an equity stake. And, it looks like there were serious talks with the Kuwait Investment Authority, the California Public Employees' Retirement System and the California State Teachers' Retirement System. However, according to a report in the Financial Times, it appears that negotiations have ended.

Continue reading TPG foregoes deal with foreigners

TPG foregoes deal with foreigners originally appeared on BloggingStocks on Wed, 04 Feb 2009 16:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>california public employees retirement systemcalifornia state teachers retirement systemCaliforniaPublicEmployeesRetirementSystemCaliforniaStateTeachersRetirementSystemkuwait investment authorityKuwaitInvestmentAuthorityprivate equityPrivateEquityTPGWed, 04 Feb 2009 16:45:00 EST<![CDATA[Perry Capital's first loss in 20 years]]>http://www.bloggingstocks.com/2009/02/03/mea-culpa-perry-capital-s-first-loss-in-20-years/http://www.bloggingstocks.com/2009/02/03/mea-culpa-perry-capital-s-first-loss-in-20-years/http://www.bloggingstocks.com/2009/02/03/mea-culpa-perry-capital-s-first-loss-in-20-years/#commentsFiled under:

Founded in 1988, Perry Capital has posted a stunning investment track record. But, in 2008, there was no place to hide, as all asset classes broke down. And, as a result, Perry Capital posted its first annual loss in 20 years (down 27%).

Well, the NY Times was able to snag the firm's shareholder letter. And, it's pretty good reading.

First of all, Perry Capital actually made some good bets. For example, the fund went short on subprime securities.

Continue reading Perry Capital's first loss in 20 years

Perry Capital's first loss in 20 years originally appeared on BloggingStocks on Tue, 03 Feb 2009 12:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Hedge FundsHedgeFundsinthenewsPerry CapitalPerryCapitalprivate equityPrivateEquityTue, 03 Feb 2009 12:00:00 EST<![CDATA[Dow Chemical (DOW) getting sued, watch out below]]>http://www.bloggingstocks.com/2009/01/27/dow-chemical-dow-getting-sued-watch-out-below/http://www.bloggingstocks.com/2009/01/27/dow-chemical-dow-getting-sued-watch-out-below/http://www.bloggingstocks.com/2009/01/27/dow-chemical-dow-getting-sued-watch-out-below/#commentsFiled under: , ,

At just over $13, Dow Chemical (NYSE:DOW) is already trading near its 52-week low. The shares may go lower. Rohm & Haas (NYSE:ROH), which is being bought by Dow, is suing to get the deal finished.

According to Dow Jones, "Dow confirmed that it doesn't intend to close the merger by a Tuesday deadline, with Chief Executive Andrew Liveris calling the deal 'untenable at this time' in a prepared statement. "

Dow is in a pinch. A joint venture with Kuwait, which should have brought in billions of dollars, was canceled. And, banks are not likely to lend money for most M&A deals. Private equity firms have shut off almost all of their investment activity.

Continue reading Dow Chemical (DOW) getting sued, watch out below

Dow Chemical (DOW) getting sued, watch out below originally appeared on BloggingStocks on Tue, 27 Jan 2009 08:15:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>DoWinthenewsprivate equityPrivateEquityROHTue, 27 Jan 2009 08:15:00 EST<![CDATA[Whole Foods (WFMI) a takeover target?]]>http://www.bloggingstocks.com/2009/01/08/whole-foods-wfmi-a-takeover-target/http://www.bloggingstocks.com/2009/01/08/whole-foods-wfmi-a-takeover-target/http://www.bloggingstocks.com/2009/01/08/whole-foods-wfmi-a-takeover-target/#commentsFiled under: , , , , , ,

WFMI logoWhole Foods (NASDAQ: WFMI - option chain) shares have moved higher today after privately-held Yucaipa Companies, LLC announced it has acquired a 7 percent stake in WFMI. Yucaipa is also considering other strategic moves, which might go as far as a takeover of the company. Any speculation in WFMI being a buyout target should give this stock a floor, and if you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on WFMI.

WFMI opened this morning at $10.72. So far today the stock has hit a low of $10.27 and a high of $10.89. As of 12:30, WFMI is trading at $10.75, up 74 cents (7.4%). The chart for WFMI looks bearish and S&P gives WFMI its lowest 1 STARS (out of 5) strong sell ranking.

For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $8 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in just six weeks as long as WFMI is above $8 at February expiration. Whole Foods would have to fall by more than 26% before we would start to lose money. Learn more about this type of trade here.

WFMI hasn't been below $8 since November and has shown support around $9 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in WFMI.

Whole Foods (WFMI) a takeover target? originally appeared on BloggingStocks on Thu, 08 Jan 2009 13:11:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Investors ObserverInvestorsObserveroptionsprivate equityPrivateEquitytakeoverWFMIWHole Foods MarketWholeFoodsMarketYucaipaThu, 08 Jan 2009 13:11:00 EST<![CDATA[Will 2009 mark a resurgence for private equity?]]>http://www.bloggingstocks.com/2009/01/01/will-2009-mark-a-resurgence-for-private-equity/http://www.bloggingstocks.com/2009/01/01/will-2009-mark-a-resurgence-for-private-equity/http://www.bloggingstocks.com/2009/01/01/will-2009-mark-a-resurgence-for-private-equity/#commentsFiled under: ,

2008 was one of the worst years for private equity deal volume in awhile -- an abrupt end to the boom years marked by the high-profile bankruptcies of companies like Linens n' Things.

But that could be changing: sort of. The number of bad deals of the past few years has led to a growth in "loan to own" deals: vulture private equity firms that lend money to companies struggling under the weight of earlier buyouts with the goal of gaining control over the equity.

The Wall Street Journal reports (subscription required) that buyout flops like Real Mex Restaurants and Bally Fitness are finding themselves under the ownership of new private equity firms after the original deals go south.

But 2009 could also represent a comeback for private equity in the traditional sense if credit markets loosen up. Interest rates are at historic lows and the stock market has taken a pounding leaving a number of profitable companies trading at valuations that make them extremely attractive takeover targets.

If the credit markets return to normal levels of activity, private equity could be a major catalyst for the market's rebound over the next few years by taking private many of the undervalued companies that are driving the market down.

Will 2009 mark a resurgence for private equity? originally appeared on BloggingStocks on Thu, 01 Jan 2009 14:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>private equityPrivateEquityThu, 01 Jan 2009 14:00:00 EST<![CDATA[TPG caves in to investors]]>http://www.bloggingstocks.com/2008/12/23/tpg-caves-in-to-investors/http://www.bloggingstocks.com/2008/12/23/tpg-caves-in-to-investors/http://www.bloggingstocks.com/2008/12/23/tpg-caves-in-to-investors/#commentsFiled under:

If you look at major private equity firms, they have huge amounts of capital ready for investment. So, when the credit crunch subsides, there should be a revival of buyout activity, right?

Not necessarily. Keep in mind that the amounts of capital available may be much lower. The reason: private equity firms usually have so-called capital calls. That means, over time they notify investors to pony up the required amounts of capital.

True, private equity firms are legally required to make the disbursements. But, if there is resistance, will private equity firms actually sue their investors?

Well, this is a big dilemma right now. Just look at TPG Capital. That is, according to The Wall Street Journal, the firm is paring back the capital requirements on its $20 billion fund. In all, it comes to about 10% of the total amount.

Something else: TPG will cut its management fees by 10%.

Of course, TPG has suffered some black eyes this year, such as its disastrous investment in Washington Mutual as well as big bets on bank debt.

Of course, the firm is not alone. Other tier-1 players are also sitting on some busted deals.

TPG's actions are certainly precedent setting - and are likely to be followed by its peers as we go into 2009. And, as a result, expect continued tepidness for deal-making.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

TPG caves in to investors originally appeared on BloggingStocks on Tue, 23 Dec 2008 00:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>inthenewsprivate equityPrivateEquityTPGwashington mutualWashingtonMutualTue, 23 Dec 2008 00:00:00 EST<![CDATA[20-40% of private equity firms expected to fail]]>http://www.bloggingstocks.com/2008/12/22/20-40-of-private-equity-firms-expected-to-fail/http://www.bloggingstocks.com/2008/12/22/20-40-of-private-equity-firms-expected-to-fail/http://www.bloggingstocks.com/2008/12/22/20-40-of-private-equity-firms-expected-to-fail/#commentsFiled under:

Not much more than a year ago, private equity firms were the masters of the universe. Graduates of the top business schools who once wouldn't have dreamed of anything other than investments banking were beating down their doors for a chance at seven-figure bonuses.

Now the private equity bubble -- along with the housing and credit ones -- is deflating. A new report from Heinrich Liechtenstein, a professor at Spain's IESE Business School, and Heino Meerkatt, a Munich-based senior partner and private-equity expert at Boston Consulting Group predicts that a astonishing 20-40% of private equity firms will go under. Thirty percent will survive and have a shot at prospering over the long-term. The remaining 30-50% will "hang in the balance" -- not shuttering just yet but not exactly the influence-peddlers they once were.

The role that private equity firms have played in the stock market over the past few years has been hugely important. By making bids for undervalued companies, buyout shops provided activist investors with an outlet for activating value at companies that had underperformed. Without the benefit of private equity firms, activist hedge funds will have a new challenge: Can they create alpha through more long-term oriented approaches like management changes, seats on the board of directors, and operational insight? It will be interesting to watch.

20-40% of private equity firms expected to fail originally appeared on BloggingStocks on Mon, 22 Dec 2008 12:59:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BuyoutsinthenewsPrivate EquityPrivateEquityMon, 22 Dec 2008 12:59:00 EST<![CDATA[General Motors restarts merger talks with Chrysler]]>http://www.bloggingstocks.com/2008/12/18/general-motors-restarts-merger-talks-with-chrysler/http://www.bloggingstocks.com/2008/12/18/general-motors-restarts-merger-talks-with-chrysler/http://www.bloggingstocks.com/2008/12/18/general-motors-restarts-merger-talks-with-chrysler/#commentsFiled under: , ,

The Wall Street Journal reports (subscription required) that General Motors (NYSE: GM) and Chrysler have reopened merger talks after Cerberus Capital Management, the company in the unenviable position of owning Chrysler, announced its willingness to give up part of its stake to get a deal done.

It's a nice public relations move designed to make it look like the company is doing its part to get a bailout done, but that's about it. Daimler AG, which still owns just under 20% of Chrysler, has already said that the equity in the deal is now worth zero. So Chrysler is trying to toss in nothing and call it a concession. Cerberus has still not indicated a willingness to pump any more cash into Chrysler -- that's the taxpayer's job!

Meanwhile, Chrysler shut down its factories for a month to conserve cash. The company is also socking it to its dealers with tighter terms. Dealerships will be fined (subscription required) for any new cars that languish on their lots for more than 360 days and will have to pay off the balances on any used cars that remain unsold after six months.

Given the way the car industry is right now -- with many dealers losing huge sums of money as they struggle to stay in business -- this could put more than a few dealers out of business. But given the number of dealers that the domestic car companies have relative to their foreign counterparts, that's something that will have to happen eventually anyway.

General Motors restarts merger talks with Chrysler originally appeared on BloggingStocks on Thu, 18 Dec 2008 08:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto industryAutoIndustryautomakerscereberusChryslerdetroitGeneral MotorsGeneralMotorsGMinthenewsprivate equityPrivateEquityThu, 18 Dec 2008 08:40:00 EST<![CDATA[Pink slips at . . . Carlyle?]]>http://www.bloggingstocks.com/2008/12/03/pink-slips-at-carlyle/http://www.bloggingstocks.com/2008/12/03/pink-slips-at-carlyle/http://www.bloggingstocks.com/2008/12/03/pink-slips-at-carlyle/#commentsFiled under:

As layoffs have spread across banking, investment banks and hedge funds, things have been fairly quiet for private equity firms. Then again, these operators tend to have small employee bases.

But, interestingly enough, we may be finally seeing some pink slips for the private equity folks. According to The Wall Street Journal, 3i will announce a 15% cut in its staff and that there will be a 19% cut at American Capital.

And now it looks like the tier-1 firms are not immune. The Carlyle Group is gutting 10% of its staff this week (which comes to about 100 people). There's not much deal-making to do right now. Besides, it looks like it will be tougher for private equity firms to raise new capital. If anything, the focus will be on trying to manage the existing portfolios.

What's more, Carlyle has had a variety of blunders. There was the implosion of its mortgage fund (Carlyle Capital) and the recent bankruptcy of its Hawaiian Telecom holding.

Of course, Carlyle is not alone. So, it's a good bet we'll start seeing more layoffs in the private equity world.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Pink slips at . . . Carlyle? originally appeared on BloggingStocks on Wed, 03 Dec 2008 15:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>carlyle capitalCarlyle GroupCarlyleCapitalCarlyleGrouphawaiian telecomHawaiianTelecomlayoffsprivate equityPrivateEquityWed, 03 Dec 2008 15:00:00 EST<![CDATA[Yahoo! soars on report that former AOL CEO wants to buy]]>http://www.bloggingstocks.com/2008/12/02/yahoo-soars-on-report-that-former-aol-ceo-wants-to-buy/http://www.bloggingstocks.com/2008/12/02/yahoo-soars-on-report-that-former-aol-ceo-wants-to-buy/http://www.bloggingstocks.com/2008/12/02/yahoo-soars-on-report-that-former-aol-ceo-wants-to-buy/#commentsFiled under:

Jonathan Miller, the former chief executive of AOL, is apparently trying to raise money to buy Yahoo! Inc. (NASDAQ: YHOO).

The Wall Street Journal is reporting that Miller has been talking to the only people who have any money left to invest right now, deep-pocket private equity investors and sovereign wealth funds. Miller would like to purchase the whole Yahoo! enchilada at $20 to $22 per share, for a total value of $28 to $30 billion.

Yahoo! stock is spiking on the report. As of 1:15, Yahoo! is trading at $11.74, up 9% on the day.

Last week, Zac Bissonnette wrote about the fact that Carl Icahn has recently increased his stake in Yahoo! Icahn bought nearly seven million more shares in the company last week, raising his stake in Yahoo! to roughly 5.5%. Is it possible that a buyout led by Miller is part of Icahn's plan?

Whatever the backroom maneuverings, there is a lot of skepticism about any kind of Yahoo! deal, no matter who leads it. Financing such a big deal would be mighty difficult in this market, and Yahoo!'s valuation remains in flux. So you should probably take the news as reported: people are talking about a deal for Yahoo! but no deal is in place.

Yahoo! soars on report that former AOL CEO wants to buy originally appeared on BloggingStocks on Tue, 02 Dec 2008 13:15:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>featuredJonathan MillerJonathanMillerprivate equityPrivateEquitysovereign wealth fundsSovereignWealthFundsYHOOTue, 02 Dec 2008 13:15:00 EST