peHUB Rewind

Here’s a look at the last week’s worth of scoops, data, and analysis from the peHUB team. Catch up on what you missed before it goes behind our paywall…

All First Reads | All Second Opinions

Exclusive: Jesse Rogers Leaving Golden Gate Capital

Deal Scoop: Venture Capitalists Recap Exit41

How the NYSE is Winning Over Silicon Valley

April 2010: “An Overdose of Hubris and a Deficiency of Caution”

Useful Tips for Navigating A Crazy Credit Environment

Could Mass. Insurance Mess Affect Caritas Christi Sale?

PE Debt Watch (Upgrades and Downgrades)

Lexington Partners Extends Fundraising Period, May Aim for Largest Ever Secondaries Fund

Finder of iPhone Prototype Tracked Down via Social Networking “Clues”

Shervin Pishevar on the Startup Visa Movement

5 Questions for Norman Winarsky on Siri and What’s Next from SRI

K9 Ventures Closes Its First Microfund

Live From the Google (Ventures) Plex

Yawn: PE-Backed Bankruptcies Not Even Moving the Radar

Democrat or Republican, David Rubenstein Will Laugh at Your Jokes

Exclusive: Olympus Partners Buying Into Churchill Financial

Laundry Room Chronicles: Discussing Distressed Debt

M&A Monday (On a Tuesday)

Active Network Co-Founder Returns with Bump.com

peHUB Second Opinion 5.7

Parting Gifts: Anyone want to get me this tent for my travels, which Backcountry.com refers to as an “ugly shitpile”? It’s only $50,000. I kid. (Backcountry)

Green Eggs and Ham: David Rubenstein claims he reads six to eight books PER WEEK on international flights. That’s less impressive when you learn Rubenstein’s favorite author is Dr. Seuss. (Washington Post)

Job Report: Jobs are back! So is unemployment. (Felix Salmon)

Porn Company Has Plan to Stop SEC Time-Wasting: Starting on May 5, new customers who sign up using a ‘.gov’ email address will be given a free two-week trial to the company’s flagship subscription website Pink Visual Pass, provided that the workers only use the site between 6 p.m. and 6 a.m.” Anyone who signs up will be denied access if they try to log on during the day.

The Secret Cult of Office Smokers: Ostracized by their peers, smokers are taking advantage of their time together (Businessweek)

Elevation Partners: With Bono on board, Roger McNamee’s firm was the first celebrity private equity outfit. Now the founders are struggling to prove their model makes sense. (Businessweek)

Private inequity: Investors push for more favourable fees and terms, and get them. (Economist)

PE Debt Watch (Upgrades and Downgrades)

As usual, we have a weeks’ worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor’s Ratings Services and Moody’s Investors Service.

Company: Gray Television
Sponsor: Highland Capital
Action: S&P raised its corporate credit rating on the company to ‘B’ from ‘CCC’ and removed the company from CreditWatch.
Highlight: “Our ‘B-‘ rating reflects Gray’s very high debt leverage, minimal EBITDA coverage of interest, and the mature and cyclical nature of TV advertising. Minimal positive factors are the strong market positions of Gray’s major network-affiliated TV stations and the good geographic diversification of its station portfolio.’

Second (To Last) Opinion 5.6

Founders Fund: Raised $107 million from 21 investors. (SECVentureBeat)

Freak Out! You may have noticed the markets kinda crashed a bit today, and of course, CNBC was there to cover it. Watch Erin Burnett and Jim Cramer flip out as the market collapses and rebounds (the rebound, of course, Cramer takes personal credit for). (CNBC) Cramer then claims the machines broke. NYSE says they were just fine, according to this random guy on Twitter. (Clusterstock)

And also: To recap, here is the big sell off. Here is the recovery.

Bon Appetit! Yelp is expanding to France. (Bits)

Big Deals: Blackstone, TPG and THL are looking to buy Fidelity National. (Dealbook)

When Good Performance Is A Bad Thing (Part 2)

Last week we discussed the perils of earning returns too early. It’s happening in the distressed debt world, where firms have earned returns on funds that are still in the process of being raised. If the firm continues to raise capital, it will dilute the performance of the existing investors. Furthermore, new investors will need […]

4 Comments

Have We Forgotten About 2007 Already? (Also, Goodbye, peHUB!)

I started covering private equity at Thomson Reuters two and a half years ago, right around the time a black cloud descended upon the industry. It was the fall of 2007: Blackstone Group had just gone public, Newsweek had cursed private equity by affording it the cover, and the credit crunch was settling in for a nice, long winter.

I couldn’t have picked a worse time to dive into the industry.

The collapse of private equity brought me on a pretty dark ride, from the pendulum of stress and Henry Kravis’ cold heart to reCrapilizations and fundraising purgatory.

In the past two years, I’ve gotten to write headlines like Merry Christmas, Your Firm May Fail and There’s More Than One Way To Spell “Jackass”. * I’ve badgered firms like Sun Capital, Apollo Management, and American Capital. I documented layoffs, clawbacks and writedowns, and covered PE-backed bankruptcies in meticulous detail.

Basically, things got ugly.

11 Comments

Two Years at peHUB in Two Minutes

My parting gift to peHUB is a slightly self-indulgent look at the ridiculous ways we bloggers illustrate dry, technical financial news stories.

In the two years I’ve spent writing nearly 1500 articles for peHUB, I for some insane reason saved almost every image we posted alongside the stories. So, why not put that weird mess of logos, cartoons, and Steve Schwarzman mugs to use? Here they are thrown hastily together, clocking in at just under two minutes. If I’ve ever interviewed you or written about your firm, you’re likely in here.

Note: Probably not safe to watch if you have a heart condition.

peHUB Second Opinion 5.5

Newsweek On The Block: Jon Meacham, the magazine’s publisher, may buy the magazine. (WSJ) Also, Business Insider has somewhat insultingly (or not?) bid $1 for the title. (Business Insider)

Taking Full Responsibility: Jimmy Cayne, an adult, blamed “market forces” for Bear Stearns’ collapse. (Bloomberg)

Don’t Want an MBA? Here are some business school alternatives. (FINS)

Suit Happy: CalPERS is free to sue S&P silly. (Dealbook)

The $2.3 Trillion Garage Sale: Can the Fed unload all the assets it acquired during the meltdown without crashing Wall Street again? (Slate)

peHUB Second Opinion 5.4

Faber Report: Equity checks are shrinking and leverage ratios are rising. (CNBC)

Hypocrisy: Anti-Wall St. Lawmakers Also Sold Stocks Short (Dealbook)

Invest Here: The anti-aging industry is booming. (Businessweek)

Every Dollar Counts: PE firms are cleaning up on dollar store investments. (Deal Journal)

Lobby Your Heart Out: Why have private equity and hedge funds avoided much of the Wall-Street-directed ire of the last two years? Because of lobbying groups like the Private Equity Counsel, of course. (Politico via PE Beat)

2 Comments

Not-For-Profit Hospitals, Meet Leverage

The hospital sector is ripe for consolidation, an opportunity private equity firms are licking their chops at. A new study from Moody’s outlines the opportunity for acquisitions of not-for-profit hospitals, indicating a “significant shift” in the hospital industry is underway.

Two recent deals have paved the way: In March, Cerberus Capital Management acquired Caritas Christi Health Care. More recently, Vanguard Health Systems, a hospital operator backed by Blackstone Group, acquired Detroit Medical Center. The deals, which both involve a private equity investor making inroads into a market dominated by not-for-profit hospitals, show an increased appetite for not-for-profit hospitals from private investors. Likewise, they put pressure on what’s left of the not-for-profit hospitals, which now face increased competition from for-profit hospitals.

M&A Monday (On a Tuesday)

Here are some potential target ideas, rumored or official, to jumpstart your deal pipeline. Our sources are various news reports and the Buyouts “Seeking Buyers” list.

Bigpoint GmbH, the German online gaming portal, is considering a sale, mergermarket reported. The company hired Montgomery & Co. has to help it explore strategic alternatives after receiving inbound interest in the company.

The Washington Times is for sale by its owner, Unification Church. (AP)

Royal Bank of Scotland continues to seek buyers for Hanco, its ATM business.

peHUB Second Opinion 5.3

Fat Cat Homes: Yes, in a cheap but effective pageview grab, Business Insider has detailed the 15 most expensive homes owned by bankers in Manhattan. Let the populist rage begin! (BI) To skip to Steve Schwarzman’s $30 million home, which includes 11 fireplaces, 37 rooms, 43 closets, a gym, sauna, steam room, pool room, screening room and servant’s quarters, click here. There’s also Steve Feinberg’s Egyptian mansion.

Hmm: Goldman Sachs clients are preparing to sever ties. (All except Blackstone…) (Independent)

Continental and United Complete Each Other: The gushy conference call and press release from the “merger of equal” airlines was a little too Jerry Maguire for Deal Journal. (DJ) Also, the deal was prompted by jealousy?

Email Battles: Wall Street Defender versus Wall Street Antagonist.

Groundbreaking Research: Bullies still pick on fat kids. In other research news, there is still no cure for cancer. (U.S. News & World Report)

Democrat or Republican, David Rubenstein Will Laugh at Your Jokes

We spotted a very jovial David Rubenstein yukking it up near the front row of the White House Correspondents dinner this weekend. Carlyle Group is not a partisan firm so much as a Washington firm—the PE house has had Republican and Democrat heavyweights on its roster, ranging from George Bush, Sr., to Mack McLarty, who was President Clinton’s chief of staff and Arthur Levitt, Clinton’s SEC Chairman appointee. Plus, co-founder David Rubenstein himself was part of the Carter Administration.

View him around 5:30 below. For the highlights from President Obama’s Daily-Show-written jokes, go here.

Yawn: PE-Backed Bankruptcies Not Even Moving the Radar

It seems appropriate that the last monthly bankruptcy list I compile racks up a big fat zero.

The closest thing we have is the possibility that Apollo Management’s Innkeepers USA, a real estate investment trust, might maybe possibility go bankrupt, according to the Wall Street Journal. Apollo acquired the company in 2007 for $1.5 billion; it is in the process of exploring “all possible” restructuring possibilities.

And that’s the best we’ve got for April. When I began doing these almost two years ago, they were averaging 10 to 15 per month. If PE-backed bankruptcies continue to trend down (and, they can’t really go down much further from here), my successor will be spending much less time hunched over elaborate spreadsheets.

peHUB Rewind

Here’s a look at the last week’s worth of scoops, data, and analysis from the peHUB team. Catch up on what you missed before it goes behind our paywall…

All First Reads | All Second Opinions

All You Have Is Your Word

Mint’s Founder on Blippy: I Don’t Get It

Don’t Cross An Executive Recruiter

Quadrangle Secures Big Return from Protection One

Lise Buyer on Bad Banker Behavior, Anxious VCs, and Whether Twitter Could Go Public Tomorrow

Jon Moulton’s Private Equity Glossary

Is Apollo PE’s Only Go-Shopper?

Bertram Capital Back In Market with Second Fund

Tech Titans: Inside the Company That’s Keeping Them Safe from Kidnappers, and Pie Throwers

In Defense of Quitting a Startup

Is Distressed Fundraising Still Red Hot?

When Good Performance Is A Bad Thing

HealthCare Ventures Raising Ninth Fund

Apple/Siri Notes: Scoble “Is A Very Smart Guy”

peHUB Second Opinion 4.30

Crying Wolf? A brief history of alarmist-and wrong-Wall Street predictions about the effect of new regulations. (Slate)

I think I can I think I can: Valley VC’s are, like, so done being down, according to this survey. (Dealbook)

The Oracle Speaks: The economy is showing signs of improvement, according to Warren Buffett. (AP)

Lucky Charms: They apparently actually matter. So, uh, forget about hard work or being in the right place at the right time. Just find that 30-year-old rabbit foot you carried around in high school. (WSJ)

Where Have All the Bond Vigilantes Gone? Governments are borrowing more than ever, yet rates remain low (Businesweek)

PE Debt Watch (Upgrades and Downgrades)

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from ratings agencies Moody’s Investors Service and Standard & Poor’s. This week the agencies focused on Sagittarius Restaurants, Securus Technologies, American Tire Distributors and Integra Telecom.

Company: Sagittarius Restaurants LLC
Sponsor: Charlesbank Capital Partners
Action: S&P said it lowered its corporate credit rating on the company to ‘CC’ from ‘CCC’.
Highlights: This action comes after the company disclosed that its subordinated lender agreed to reduce its claim substantially below face value. “We view this as tantamount to a default, given the current distressed financial condition of the company and since the investor is receiving less than the original promise of the original security,” said Standard & Poor’s credit analyst Charles Pinson-Rose.

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