Category Archives: private equity

How David Rubenstein is Like Eliot Spitzer

Why would you invest money with the Carlyle Group? Is it because of their "disciplined approach" to investing? Their "conservative and disciplined investment philosophy"? Their "conservative investment philosophy and disciplined investment process"? Well, Carlyle co-founder David Rubenstein has some news … Continue reading

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When Private Equity Companies Fail

What happens when a private-equity shop fails? Boston Consulting Group thinks that will happen a lot in coming years: The consultants expect 50% of all companies backed by private-equity funds to default on their debt; as many as 40% of … Continue reading

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Endowments Dump Private Equity Stakes

University endowments such as Harvard’s are almost uniquely well-suited to invest in private-equity funds: since they’re permanent pools of capital, they can ride out market fluctuations and illiquidity, and hold their stakes for decades if necessary until they mature. Or, … Continue reading

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Might Blackstone Go Private?

At lunch today with Mick Weinstein of Seeking Alpha, I wondered whether Blackstone, which currently has a market capitalization of around $2 billion, might not be a takeover candidate. After all, it would be something of a jewel for many … Continue reading

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LPs vs Shareholders at Blackstone

A Blackstone spokesman is quoted in the WSJ today, saying that the investors in the company’s funds are very happy that Blackstone went public. "Our LPs are very comfortable with our status as a public company," said a Blackstone spokesman. … Continue reading

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Leon Black: The Picasso Connection

The art world has no √©minence more grise than John Richardson, art historian extraordinaire and author of an enormous biography of Picasso which, three volumes in, is still 40 (of Picasso’s) years from completion. Part of the problem is that … Continue reading

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Private Equity in Hedge Funds: A Weird Combination

File under "things which really don’t make a whole lot of sense": Lehman Brothers aims to raise $3 billion to $5 billion for a fund to buy strategic minority stakes in hedge-fund managers, according to sources at the bank. The … Continue reading

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Leverage Datapoint of the Day

I’ve somehow managed to avoid so much as mentioning the Clear Channel saga on this blog until now; for some reason I just couldn’t get excited about it. But Heidi Moore gets a good quote in her summing up today … Continue reading

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The State of Private Equity

Apollo’s Leon Black (#6 on the latest private equity league table) kicked off an interesting discussion on the private equity panel this morning, when he said that the backlog of leveraged loans held by banks has come down from over … Continue reading

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Why Private Equity Shops are Recapitalizing Banks

Many banks are raising capital these days; the latest to hit the headlines are Washington Mutual, raising $7 billion from TPG, and National City, which is getting something north of $7 billion from a syndicate led by Corsair Capital. Such … Continue reading

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Private Equity Debt Buybacks: A Second Bite at the Cherry?

Here’s one for Dear John Thain or anybody else wondering about what happens when a private-equity shop buys the debt of its own portfolio companies. Let’s say that the portfolio company in question goes bankrupt, and is taken over by … Continue reading

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The Problem With Private Equity Buying Leveraged Loans

Remember how those private-equity companies are buying back a bunch of their own debt at 90 cents on the dollar? Well, if it’s literally their own debt, rather than simply a bunch of leveraged loans in general, then Equity Private … Continue reading

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Apollo’s Discount IPO

One thing the stock market has in common with the art market is a very strong allergy against primary-market offerings which have fallen in price from the last time round. It’s one of the reasons why gallerists invariably sell their … Continue reading

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Where Private Equity Meets Public Debt

Back in October, things were so much smaller. The idea then was that KKR would put up $2 billion of equity, leverage it up to a total of $10 billion by borrowing $8 billion from Citigroup, and then use the … Continue reading

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Blackstone: Paying Normal Tax Rates

Heidi Moore, liveblogging the Blackstone conference call, picks up on something interesting: Puglisi tackles taxes. Regulators, are you paying attention? Here is what he says: “While our tax rates for the full year were approximately 15% for the fourth quarters … Continue reading

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Blackstone Datapoint of the Day

Blackstone’s shares fell below the $14 level earlier today, in the wake of a dreadful earnings report showing a net loss of $170 million in the fourth quarter. At $14 a share, it’s worth remembering, it would take a rise … Continue reading

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EMI: Where the Owner Assails the Staff, and Vice-Versa

What happens when you cross a creative industry with a private-equity shop? Ask Guy Hands, who just bought EMI: What we are doing is taking the power away from the A&R guys and putting it with the suits – the … Continue reading

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Some Things I Learned from James Stewart’s Steve Schwarzman Profile

It’s long, so you might want to skip the whole thing. Here are some juicy bits: Schwarzman also owns a coastal estate in Saint-Tropez and a beachfront property in Jamaica. He typically spends summer weekends and August in East Hampton; … Continue reading

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Bankruptcy: No Obstacle to Private-Equity Profits

Megan Barnett has not one but two excellent articles on Portfolio.com today. This morning she checked in on the Citadel IPO story, concluding that for all the buzz, it still ain’t gonna happen. This afternoon, she tells the story of … Continue reading

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Blackstone: The Stock Buyback Which Isn’t

Stock buybacks are good news for shareholders for two reasons. Firstly, they increase demand for the stock, which helps boost the share price – but that effect is one-off, and temporary, and mostly benefits the shareholders who sell their stock … Continue reading

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How Cerberus’s Cost Cutting Threatens the US Economy

There’s bad news at Cerberus, and that could mean bad news for all of us. Cerberus has lost a lot of money on its mortgage-servicer investments, and is now hoping to merge its main mortgage asset, GMAC, with Chrysler’s lending … Continue reading

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The X Factor in Terra Firma’s EMI Acquisition

Terra Firma’s investment in EMI doesn’t seem to be working out so well, according to Lina Saigol. But why did Terra Firma’s Guy Hands make the "impulsive acquisition" in the first place? Saigol has a normal-and-boring explanation: Mr Hands wanted … Continue reading

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Chrysler Follows the Strip-and-Flip Playbook

The Private Equity Council has what might seem to be a very tough job: persuading lawmakers that private equity principals shouldn’t pay income tax on their income. In reality, however, the job is easier than that – all they need … Continue reading

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Northern Rock: The Bidding Heats Up

If Chris Flowers thought he was going to have little competition in his quest to buy Northern Rock, he’s been comprehensively disabused of that notion at this point. The Virgin bid might sound a bit lightweight (a rebranding to Virgin … Continue reading

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When US Brands go Global

The Breaking Views column in today’s WSJ comes up with a startling figure: Tommy Hilfiger (the brand, not the person) is now worth $2.5 billion – even as the value of its US franchise continues to steadily decline. UK private-equity … Continue reading

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