Friday Feedback

The sky is gray, the U.S. economy keeps (barely) growing and we’ve all learned an important lesson about the perils of filing a personal defamation suit. In other words, it’s time for Friday Feedback. No specific topic today, just a potpourri…

Joe on buyout fund performance data: “As a fund-of-funds guy, I see a lot of these groups, these numbers “feel” right based on my information, which like most LP’s is vague and lagging. Central to any confidence is the fact that there are some really good companies in certain portfolios, BS, WP, Bain, DLJ Merchants, the night sweats come from not knowing the real debt load or valuations…Overall things look very good from here.”

We’ve got two opposing views of the Panorama Capital fundraising. First is Eton: “I think you’re right to call this a blessing in disguise. Too many VC firms raise more capital than they can handle, which leads them to make big bad bets, in order to push more money out the door. It’s a case where too much of a good thing (capital) can become a bad thing.” Omar disagrees: “Come on Dan. Stop putting lipstick on a pig. If you raise less than half of what you’re looking for, it means that LPs don’t like your track record or something else about you. To me, that means that whatever you’ve raised might end up being too much.”

Fred on KKR’s partnership with the Environmental Defense Fund: “I agree with your analysis Dan, except the part about it providing a model for other private equity firms. You can certainly make a financial case for what KKR is doing, since cutting back on energy reduces costs, but something like this is really about a sense of moral responsibility. That’s not something I think most firms have.” Mike writes: “They need to change the definition of greenwashing to be the brainwashing you and most of the country have suffered on global warming. Poor KKR – they’re going to go to the trouble and expense for a hoax and ultimately it won’t prevent them from being attacked, those capitalist pigs.” Kelly: “Brilliant PR move by KKR. I wonder if it will release results of the environmental audits, or the progress they make?”

HB on my post about why Cerberus should not invest in Blackwater (which it now says it won’t): “The only issue for Cerberus or any other investor, PE or not, presuming their investment objectives permit such an investment, should be to evaluate the opportunity for risk and reward. Many investors, of course, would not consider a Blackwater-type investment. A number of tax-exempts are themselves prohibited from investing in companies for which firearms is central to their business and, accordingly, PE sponsors may well prefer to take a pass, even if an investment in a company like Blackwater otherwise was within the scope of their objectives. I assume that Cerberus did take those kinds of considerations into account, but I don’t know and I don’t really care. What would be bad policy is if the investment discretion of institutional investors to invest in otherwise lawful businesses becomes circumscribed, not because of the managers’ investment assessments or the investment policies of their partners, but out of fear that people politically opposed to such a business may injure their reputations. Your post was short of contributing to that, but not by much.”

Charlie: “It doesn’t seem like you’ve been on the road for two weeks. All done for the year?” Just a short reprieve Charlie. But something big is planned for June… Stay tuned.