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  • Curious where deal prices are heading in the coming months in the North American middle market? Want to know how sponsors are reacting to high prices?

    You’ve come to the right place. If you take our quick s […]

  • Buyouts is accepting applications for its 16th annual Deal of the Year awards, honoring exceptional buyouts that were fully or mostly realized in 2015. The deadline for submissions is February 26, 2016, but the […]

  • The operating partner model has gained in popularity over recent years and is widely employed by private equity firms as a means of creating value. Operating partners bring their expertise to portfolio companies, […]

  • Solomon Owayda and Christine Patrinos have partnered to launch Mozaic Capital, a firm that advises institutional investors on the sale of interests in private equity and related limited partnerships. Selling has […]

  • Solomon Owayda and Christine Patrinos have partnered to launch Mozaic Capital, a firm that advises institutional investors on the sale of interests in private equity and related limited partnerships. Selling has become an increasingly popular activity in what is still considered a largely illiquid asset class.

    A decade ago investors may have avoided the secondary market over fear general partners would label them as disloyal or fickle. “I think that stigma is gone,” said Founding Partner Owayda, probably best known for launching and building the private equity portfolio for California State Teachers’ Retirement System from 1988 to 1997. The secondary market, he added, “is becoming a very important tool for (investors) to better manage their portfolios.”

    Secondary advisor Greenhill Cogent estimated that secondary deal volume hit $42 billion last year, more than three times the $12 billion volume in 2009. U.S. public pensions that have recently said they plan to sell portfolios on the secondary market include California Public Employees’ Retirement System, Florida State Board of Administration and New York City Retirement Systems.

    Owayda and Patrinos began their professional affiliation more than two years ago. Owayda, then a managing director in the Boston office of advisory shop Siguler Guff & Co, and Patrinos, then a Boston-based consultant advising on secondary deals, teamed up to advise Siguler Guff clients on the sale of limited partnership interests. Previously Patrinos spent nearly five years sourcing and managing fund investments at funds-of-funds manager HarbourVest Partners. Owayda earlier in his career saw action as a secondary buyer as chief investment officer of the advisory business of SVG Capital PLC.

    Mozaic Capital, which will take on assignments of any size, has the capacity to work on up to three to four deals at a time, said Owayda. It will act as more than just a broker in transactions. Upfront, said Owayda, the firm can review the investment strategy of its clients, as well as their objectives for achieving liquidity. It can provide an estimate for the valuation of their holdings and advise on how to best structure the sale to get the best price—including breaking up a larger portfolio into pieces.

    “We work with LPs as their agent to help them (evaluate) their portfolio, (advising) them what to sell, when to sell, and to whom to sell,” said Owayda. The firm has relationships with some 100 buyers that together account for the majority of secondary market purchases, he added. Clients should figure on a minimum of 45 days from start to finish for a transaction.

    In getting off the ground Mozaic Capital has formed a strategic alliance with Boston-based placement agency Monument Group. In addition to sharing office space and back-office systems, Owayda and Patrinos are registered broker-dealers under the Monument Group platform. Down the road, said Owayda, the pair may register as broker-dealers under Mozaic Capital.

    Industry sources say competition for deals in the last 18 months has pushed the going rate for secondary advisory work generally down to the range of 50 bps to 75 bps of the sale price, although complex or smaller deals could command more. The largest portfolios command the lowest prices.

    Action Item: Reach the firm at 617-329-6100

    Buyouts Snapshot is a brief look at selections of work that appear in our premium publication Buyouts. Buyouts is published by Buyouts Insider. Subscribers can read the full story here. Go here to subscribe to Buyouts.

    Photo courtesy of Shutterstock

  • Appointed Partners, founded by Marci Nigro, former partner at executive search firm TEG,  launched today to help match PE-backed companies and Fortune 1000 companies with board members and other executive t […]

  • Appointed Partners, founded by Marci Nigro, former partner at executive search firm TEG,  launched today to help match PE-backed companies and Fortune 1000 companies with board members and other executive talent.

    PRESS RELEASE

    New York, NY, September 8, 2015- Appointed Partners, a leadership advisory solutions firm launched today, transforming the way Private Equity and Fortune 1000 companies meet and collaborate with vetted, qualified Board Director and C-level leaders. The new firm has a sharp focus on C-level and Board Level expertise at the Functional level, as well as at the Diversity level which includes Female diversity, next generation leadership, and cross-functional board expertise.

    Appointed Partners was created with the mission to remove the obstacles that are holding companies back from realizing optimal Board Director and C-level composition. The Appointed Partners solutions empower clients to employ happy and effective leadership teams by proactively addressing and overcoming leadership issues that can undermine company performance such as stagnant or distressed leadership teams, lack of objective perspective, revolving door in executive roles, lack of board refreshment, lack of diversity, and lack of succession planning.

    “It takes more than great talent to make a great board. Talent alone cannot overcome dysfunctional dynamics. Companies increasingly recognize the distinction between diversity and inclusiveness: Diversity is counting numbers; inclusiveness is making the numbers count. Boards need to improve on both dimensions.” June 2013 issue of Harvard Business Review.

    The team at Appointed Partners applies decades of expertise in best of breed professional matching, helping clients mitigate risk, and facilitating executive connections. They use a proven, unbiased, and methodical process to professionally match and connect their clients with a coveted network of Board level and C-level leaders. Whether there is an immediate or future need, their services lead to and secure both interim and permanent engagements. With their trusted advisor status, Appointed Partners operates with the utmost integrity, confidentiality, professionalism, and thoughtfulness. Appointed Partners empowers clients to have direct connections to a diverse and pre-qualified collection of leaders who bring fresh perspectives, the right blend of skills, community eco-systems, and transformational influence across the board.

    About Appointed Partners
    Appointed Partners is a leadership advisory solutions firm, transforming the way Private Equity and Fortune 1000 companies meet and collaborate with vetted, qualified Board Director and C-level leaders. As a firm comprised of authentic, seasoned business professionals, Appointed Partners takes a humanistic approach in tackling one of the biggest challenges that all companies face which is sustainable access to a diverse bench of keyed up Board and C-level leaders. Appointed Partners prepares clients for planned or unforeseen leadership changes in Technology, Financial Services, Pharma/Bio Tech, Healthcare, Energy, Software, Consumer Goods, and Media. For more information, please visit http://www.appointedpartners.com or call 212-658-1986. Media contact, Kathryn Daniels, email [email protected]

  • Lawrence J. Aragon‘s profile was updated 6 months ago

  • Blackstone Group is shopping specialty materials company Polymer Group Inc. to prospective buyers in a deal that could approach $3 billion in value, according to a source familiar with the process. The firm is said to be preparing the company for either a sale or IPO.

    Citigroup is advising on the process, which may or may not lead to a transaction, according to a second source. It isn’t clear when the company went on the market, but our first source said management made presentations to prospective buyers within the last two months. The same source said that in a sale the company could be expected to fetch upwards of 10x the roughly $270 million in adjusted annual EBITDA that it generates.

    Buyout shops that could have an interest in Polymer Group include Advent International, Apollo Global Management, Carlyle Group, Golden Gate Capital, Kohlberg Kravis Roberts & Co and Onex Corp.

    Blackstone announced plans to acquire Polymer Group in a take-private transaction in late 2010 for $326.2 million in cash, according to Reuters news service. The firm used its vintage 2006, $21.7 billion Blackstone Capital Partners V LP to acquire the company from distressed debt specialist MatlinPatterson and affiliates, which held 63.4 percent of the voting power of the company’s shares.

    Based in Charlotte, N.C., Polymer Group makes materials used in health care products such as surgical gowns and face masks, as well as in consumer products such as wipes and diapers. The company, which employees about 4,750 people, generated adjusted EBITDA of $73.5 million in the first quarter, up 51.2 percent from the year before. Acquisitions, higher demand for core products and the company’s management of raw material costs, among other factors, accounted for the growth, according to a press release. Net sales in the quarter rose 9.1 percent to $461.2 million.

    Executives at Blackstone declined to comment, while those at Polymer Group and Citigroup couldn’t be reached for comment.

    Photo courtesy of Shutterstock

  • CalPERS, the nation’s largest pension fund, announced today that it will report the amount of carried interest it has paid to general partners for fiscal 2015 in the fall. The announcement follows a statement in […]

  • Brooks Zug, senior managing director and co-founder of funds-of-funds manager HarbourVest Partners, this spring told an audience of deal-makers about a buyout opportunity some of his associates had recently […]

  • Don’t think a cyber attack could impact your mid-market shop? That’s what The Riverside Company thought—until it happened to them.

    A  few years ago, two of Riverside’s portfolio companies experienced breaches. In one instance, hackers gained access to sensitive customer information and threatened to expose that data if the portfolio company didn’t pay a hefty ransom. In another case, hackers infiltrated a portfolio company’s computer systems to steal credit card information. Fortunately, in both instances, the companies resolved the issues before any serious damage occurred.

    “Both these portfolio companies were less than $20 million in revenue so it was pretty amazing they would get targeted,” said Ron Sansom, a managing partner at Riverside. “That’s what really woke us up to this problem—that even these companies could get hit.”

    To read the rest of this article, download the summer edition of Connections in the Middle Market, a publication produced by the partnership of Buyouts Insider, publisher of peHUB and Buyouts Magazine, and global law firm Duane Morris.

    Photo Credit: Image by shutterstock

  • Obamacare is here to stay.

    The bell couldn’t save “Screech.” Dustin Diamond going to jail for four months.

    Courtney Love’s wild ride. Rockstar says protestors trashed her Uber car.

    Univision dumps […]

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  • We’ve had a terrific turnout for our Buyouts East conference in Cambridge, which runs today and tomorrow. For those who weren’t able to make it, here are the highlights so far:

    1. “Everyone wants to be a middle […]

  • A former executive with WL Ross & Co is suing the private equity firm to force it to open its books and records to him, the Wall Street Journal reported.

    David Storper, once a member of WL Ross’s Investment […]

  • It’s hard to beat today’s frothy fundraising market for jumping ship to raise a debut fund. But Stephen Schwarzman, chairman, CEO, and co-founder of Blackstone Group, this weekend cautioned young professionals to think twice before taking the plunge.

    “The biggest mistakes I’ve seen people make in their careers is, when they’re good, after two or three years…they announce that they’re going out to start their own firm,” said Schwarzman, 67, when asked to give advice to new MBAs working in the buyout business.

    Schwarzman, who co-founded Blackstone with Peter Peterson in 1985, made his remarks Sunday, Feb. 1 during an on-stage interview with Josh Lerner, professor of investment banking at Harvard Business School. The interview took place in front of an audience of MBA students, private equity professionals, reporters and others attending the school’s 21st annual Venture Capital & Private Equity Conference.

    Schwarzman said he’s “begged, literally begged” some of these start-up-minded hopefuls not to do it, pointing out that they’re not far along enough in their careers, that they lack the experience and credibility to raise money and succeed. “They sort of looked at me like I was trying to discourage them so that they’d stay at Blackstone,” he said.

    “That’s actually not the case,” Schwarzman said. “If someone really wants to go out on their own they’re going to go anyhow.” But he added: “Every (young) person who’s made that decision, in my view, has failed. Everyone. You have to have a certain cumulative knowledge and judgment and so forth in finance, and then you can go out.”

    Schwarzman acknowledged the current fashion of viewing career failure, especially early on, as a springboard to great achievements. He said that failure may be an option in a field like venture capital, but not in private equity. “A few years” might pass, he said, before the founding partners realize that they’ve taken a wrong turn in their careers. They get “detoured for years, and getting back on a better track is really hard,” he said. “This is an extremely consequential decision for you and you’ve got to get it right.”

    He counseled those that insist on trying to launch new firms to have something unique to offer. “You better have something that the world doesn’t have,” he said. But, even then, he added, “you might screw it up through your own ineptitude.”

    To be sure, the story of Schwarzman’s own start in private equity appears to belie his cautionary remarks. He was just 37 when he co-founded Blackstone in 1985, having earlier worked for Peterson in the M&A advisory department at Lehman Brothers.

    Boutique M&A advisory work was their first line of business, he said, but the pair soon had their eye on raising a buyout fund. They were drawn by the prospect of generating a steady stream of management fees that could sustain them while looking for investment opportunities, and of earning the still-standard 20 percent profit-share.

    But this was in an earlier era and the buyout business wasn’t nearly as crowded. Blackstone raised a vintage-1987 fund of $800 million. “Only in the old days could you actually go out and try to raise $1 billion with two people who never made an investment…,” Schwarzman said. “That takes a high persuasive power, and an understanding of capital markets.”

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