Last week I brought you a live report of “All The News Fit To Blog” from day one of the Dow Jones Private Equity Analyst Conference. Today I’m back with a retrospective round two—highlights of the conference’s second, less action packed day.
To recap—we’ve learned that Mr. Schwarzman isn’t too worried about the crisis’ effect on his firm. We learned that at least one oil baron don’t believe oil alone is sustainable. And we learned distressed investors know how to make a rainy day into a storm.
On the second day, I got an earful about a fund raising effort, a mystery auction, IFRS, wine, beer, and shots, and the War For Funds. Follow the jump to experience hear what I heard and see what I saw.
Featuring contributions from my colleague at Buyouts, Bernard Vaughn.
FACT: Vantage Point Venture Partners is raising its second fund, which will target alternative energy.
FACT: Even though traditional PE firms are skeptical of “green” companies with no revenue stream or established balance sheet, they can get in on the movement by investing in the service providers and suppliers to the industry, said Michael Ascione at Berkshire Partners.
QUOTE: More private equity money will be lost in this cycle than in any previous cycles, according to Rich Caputo of Jordan Co., a firm that’s been around since 1974.
FACT: Deal flow will remain patchy in 2009, according to an electronic audience poll.
FACT: The electronic polling function is audience participation for the digital age!
FACT: Consistent with the digital age, I find myself distracted between polling questions.
PASSING COMMENT: MatlinPatterson is conducting a sale of a company to a strategic buyer, Mark Patterson mentioned.
FACT: Peter Kaufman, m.d. at Bacchus Capital Management, which is supposedly raising a fund targeting wineries, doesn’t really care for wine. More of a “beer and a shot guy.”
QUOTE: The current crisis may benefit private equity firms in the fight to keep carried interest untaxed, according to Doug Lowenstein, the head of the Private Equity Council. “As a campaign talking point, when people hear, ‘We need to tax the Wall Street fat cats,’ people start to think, “Really?’” It is no longer the most important economic issue, he said.
AIG: Best quote I’ve heard about it to date. “They’re having a yard sale instead of a fire sale.”
FACT: The SEIU’s efforts to attach individual private equity firms could become completely moot if a “card check union law” in put into place. Such a law would eliminate the SEUI’s narrow focus on private equity by allowed unions to be formed by simply marking a box on ones payroll. forms.
CLARIFICATION: The previously referenced Wars For Funds, Deals and Talent being fought by private equity soldiers is actually a civil war, waged by private equity professionals against private equity professionals. Now I hate to be the one to point this out, but I think that’s what the free market world likes to call “competition.”
YIKES: Things are moving fast. When Bernard told an HSBC banker at lunch that he’d heard Goldman and Morgan’s shares were tumbling, the banker responded with, “Oh no, they’re doing fine.”
FACT: The only countries in the world that do not have set dates in place for full IFRS compliance are Columbia, and the United States, said Aamir Husain, a Partner at KPMG.
FACT: IFRS compliance is much, much bigger than Sarbanes Oxley. Where SarbOx costs around $1 million to $3 million to convert to, IFRS can take anywhere from $5 million to $150 million, and requires a two-year comparison period. (Meaning, if you are compliant in 2014, you’ll need to have reported in both IFRS and GAAP for 2012 and 2013.)
FACT: Universally, the second day conference lunch is always weak. (No insult here, it’s just a fact of life.)
ANNOUNCEMENT: Someone lost a black leather Louis Vuitton purse.
SOMEWHAT RELATED: There were more women than usually attend financial hoe-downs such as this. I’m not sure why but this might be the first place I was actually happy to see a line at the ladies room.