peHUB First Read

Good morning Hub Readers. Click through for some of the latest news updates from the weekend before the busy week starts.

Itron Acquires VC-backed SmartSynch

Itron, a provider of energy and water resource management solutions is to acquire Jackson, Mississippi-based SmartSynch in a $100 million transaction. SmartSynch is a provider of point-to-point smart grid solutions that use a cellular network for communications. Backers of the company include Kinetic Ventures, JP Morgan, Endeavor Capital Management, Nth Power, GulfSouth Capital, Siemens Venture […]

Slideshow: A Look at CalPERS’s Top-Performing Funds

The California Public Employees’ Retirement System is, as everybody knows, the nation’s largest public pension fund with $233.6 billion of assets as of March 31 (the latest figure available, reported today). It also has one of the industry’s largest portfolios of private equity investments; its $33.2 billion Alternative Investment Management program represents 14.2% of its total assets.

We thought it would be interesting to find some of the system’s top-ranking funds, which it reports on its Web site. The list that follows is current through Sept. 30. Sponsors report mark-to-market values on their portfolios quarterly, and they have 120 days to provide the information to their investors, so there is a two-quarter lag before CalPERS reports individual fund performance to the public.

This slide show is a countdown, presented ranked by investment multiple. (As a point of comparison, when sister publication Buyouts Magazine did its annual ranking of fund performance last fall, based on reports from multiple sponsors, we found that it required a 2.0 investment multiple to crack the top quartile.) We had one tie, at No. 8. There we ranked T3 Partners II LP higher than CVC European Equity Partners III LP because of its larger IRR.

PE Debt Watch (Upgrades & 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. This week three companies were a mix: one bankruptcy, one downgrade, and one outlook imrovement.

Company: Electrical Components International
Sponsor: Francisco Partners
Action: Moody’s lowered the company’s probability of default rating and the corporate family rating to Ca from Caa3 following its filing for protection under Chapter 11 of the US Bankruptcy Code on March 30, 2010.
Highlight: The last rating action was on January 6, 2009 at which time Moody’s downgraded ECI’s corporate family rating to Caa3 from Caa2.

Weekly Downgrade Wrap-Up

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from Standard & Poor’s Ratings Services and Moody’s Investors Service. This week was relatively slow, with the big news coming from the largest LBO of all time, KKR and TPG’s buyout of TXU (now known as Energy Future Holdings).

The Texas-based energy giant proposed a distressed debt exchange which will reduce its obscene debt load from $44 billion to $42 billion. Naturally the move warranted a downgrade from both Moody’s and S&P. Moody’s expressed concerns over “looming maturities” on around $23 billion of debt in 2014, which it said will need to be addressed before 2013. Meanwhile, carbon and mercury legislation threatens the company’s “coal-fired margins,” Moody’s wrote. Read more on the mega-buyout’s financial situation below.

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