Firms and Funds

SEOUL (Reuters) – Private equity firm Blackstone Group (BX.N) will launch a unit in South Korea this month to buy companies and real estate assets for a combined $2 billion from cash-strapped domestic firms, a report said on Monday. The Maeil Business Newspaper cited the finance and economy ministries and the National Pension Service (NPS) […]

The $26 billion Arizona State Retirement System, a newcomer to private equity, is searching for one or more separate-account managers to commit roughly $1 billion over three years. RFPs were issued in October, and responses were due in mid-December. “We have just started evaluating proposals. I don’t expect any awards earlier than March 31, if […]

(Reuters) – General Electric Co’s GE Capital unit will cut between 7,000 and 11,000 jobs, the CNBC television channel reported on Friday, citing sources. GE had said it would reduce costs at GE Capital by about $2 billion this year, according to the report. A GE spokesman did not immediately return calls seeking comment. GE […]

(Reuters) – Sun Hung Kai Financial (0086.HK) on Friday said it was launching a $100 million fund that will partner with Paulson & Co and its distressed asset investment fund that focuses on financial companies. Sun Hung Kai said Paulson, run by legendary investor John Paulson who made billions of dollars betting against the U.S. […]

Emerging Capital Partners, a Washington, D.C.-based buyout firm that invests in African companies, has sold its minority stake in SOMDIAA SA, a producer of sugar, flour and animal feed in Central Africa, for $26 million. The firm’s investment, made in 2003, earned it a 2x return. Press release: Emerging Capital Partners (ECP), an international private […]

(Reuters) Private equity firms have more than $1 trillion in firepower for deals despite a slowing fundraising trend in the second half of 2008, research and consultancy group Preqin said on Thursday. “Fundraising has undoubtedly been affected by the turmoil in the global economy in the latter half of 2008,” said Preqin spokesman Tim Friedman […]

LONDON (Reuters) – Mizuho Corporate Bank, part of Mizuho Financial Group (8411.T), said on Thursday it has cut 27 jobs across its global leveraged business. The job cuts were to remove duplication as Mizuho Corporate Bank adjusts to market conditions, it said in a statement. The bank said will continue to work on the origination, […]

The mad rush to sell commitments to private equity funds on the secondary market isn't without consequence. PE firms are keenly aware that no more than 2% of a fund’s LP interests can sell on the secondary market. If they do, the fund is no longer protected by safe harbor laws that guarantee that all-important “private” status and, more importantly, “private” taxes. If more than 2% trades on the secondary market, it could be audited and deemed a publicly-traded partnership, or PTP. Examples of PTPs include publicly-traded mutual funds. The PE fund is no longer a flow-through vehicle and, as a result, returns end up being taxed twice (GPs get taxed on the income, LPs get taxed on it after distributions). There also are safe harbors for up to 10% if it is sold in large “block transfers;” ultimately this relates to how many LPs there are. Understandably, some firms are concerned about the number of commitments that their LPs will sell on the secondary market. “The other side of the coin is so draconian,” as one source said. But GPs typically have veto power over secondary sales written into their partnership agreement. So, in order to keep their safe harbor guarantee, a number of firms have told eager-to-sell LPs they’ll just have to wait. Get in line for 2009. One lawyer I talked to said there’s a mega-buyout firm that has a two-year waiting list of eager-to-sell LPs.

LONDON (Reuters) – Private equity firms have more than $1 trillion in firepower for deals despite a slowing fundraising trend in the second half of 2008, research and consultancy group Preqin said on Thursday. “Fundraising has undoubtedly been affected by the turmoil in the global economy in the latter half of 2008,” said Preqin spokesman […]

Saybrook Capital has held a $160 million close on its $300 million-targeted distressed fund, according to LBO Wire. www.saybrook.net