The IUF's Private Equity Buyout Watch http://www.iufdocuments.org/buyoutwatch/ en Copyright 2009 Thu, 04 Jun 2009 14:17:05 +0000 http://www.sixapart.com/movabletype/?v=3.2 http://blogs.law.harvard.edu/tech/rss Debt matters: what is at stake in the struggle to refinance portfolio companies http://www.iufdocuments.org/buyoutwatch/2009/06/debt_matters_what_is_at_stake.html http://www.iufdocuments.org/buyoutwatch/2009/06/debt_matters_what_is_at_stake.html Thu, 04 Jun 2009 14:17:05 +0000 Buyouts, Bread Sticks, Biscotti – and Challenges for the Obama Administration The 136 workers on strike for 9 months at the Stella D'oro bakery at West 237th Street in the Bronx are a microcosm of working America. They are as diverse as the neighborhood - African-American, Latino, "ethnic" whites, even African. A majority are women, many of them mothers and grandmothers. Most of them worked at Stella d'Oro for years, even decades, before, as they tell it, being forced out on strike. Seven months into a bitter strike, they'll all tell you "We're going to stay out as long as it takes to get a fair contract."

]]> http://www.iufdocuments.org/buyoutwatch/2009/05/buyouts_bread_sticks_biscotti.html http://www.iufdocuments.org/buyoutwatch/2009/05/buyouts_bread_sticks_biscotti.html Mon, 18 May 2009 19:04:12 +0000 Carlyle in USD 20 Million Settlement in New York Pension Fund Kickback Investigation While the investigation into illegal kickbacks paid by private equity funds to "placement agents" who secured employee pension fund investments continues, Carlyle has entered into a USD 20 million deal with the State of New York.

]]> http://www.iufdocuments.org/buyoutwatch/2009/05/carlyle_in_usd_20_million_sett.html http://www.iufdocuments.org/buyoutwatch/2009/05/carlyle_in_usd_20_million_sett.html Carlyle Group Fri, 15 May 2009 16:42:41 +0000 Spotlight on 'Placement Agents' Throws New Light on Fee Racket New criminal indictments arising from the state of New York's widening investigation into bribes and kickbacks paid to investment funds in return for pension fund investments is throwing a spotlight on the use of "placement agents" to siphon employee pension fund money into private equity deals.

]]> http://www.iufdocuments.org/buyoutwatch/2009/04/spotlight_on_placement_agents.html http://www.iufdocuments.org/buyoutwatch/2009/04/spotlight_on_placement_agents.html Sun, 26 Apr 2009 14:48:35 +0000 Private Equity and the European Commission: the Big Bluff UK private equity funds and their lobbyists, according to press reports, are frantically pressuring the government to "protect its members from imminent EU regulation" ("Private Equity sector lobbies ministers to protect it from EU", The Independent, April 20, 2009). According to the Financial Times report of the same day, Simon Walker of the British Venture Capital Association (BVCA) is "horrified" at "the extent of the burdens imposed." "Under the draft European Union law", writes the FT, "any private equity group managing funds equal to more than €250 million in total would be forced to disclose more information about its structure, strategy, and investors." More information compared with what?

]]> http://www.iufdocuments.org/buyoutwatch/2009/04/private_equity_and_the_europea.html http://www.iufdocuments.org/buyoutwatch/2009/04/private_equity_and_the_europea.html Regulation/Political Action Wed, 22 Apr 2009 14:02:56 +0000 Buy'em, Bleed'em, Buy'em Again Cheap: Could Debt-for-Equity Swaps Secure Continued PE-Ownership of Bankrupt Portfolio Companies? Private Equity funds may have found a new use for the uninvested funds (known in industry jargon as "dry powder") they're currently sitting on, which are estimated to total from USD 500 billion to as much as a trillion.

]]> http://www.iufdocuments.org/buyoutwatch/2009/03/buyem_bleedem_buyem_again_chea.html http://www.iufdocuments.org/buyoutwatch/2009/03/buyem_bleedem_buyem_again_chea.html Sat, 21 Mar 2009 15:04:07 +0000 The Commissioner, 'Transparency', and Codes of Conduct: the Last Refuge of a Scoundrel? No one can accuse EU Commissioner for Internal Market and Services Charlie McCreevy of excessive subtlety, but his current escapades set new benchmarks.

]]> http://www.iufdocuments.org/buyoutwatch/2009/02/the_commissioner_transparency.html http://www.iufdocuments.org/buyoutwatch/2009/02/the_commissioner_transparency.html Fri, 06 Feb 2009 12:17:01 +0000 'Wonderful Time, Wish You Were Here': US Buyout Funds Positioning to Profit from Potential New Tax Breaks "This is an absolute wonderful time" to be in the private equity business, Blackstone head Stephen Schwarzman has told Bloomberg. Blackstone is currently raking in fees "advising" insurance giant AIG on how to raise cash through selloffs in the wake of the gigantic 2008 bailout.

Blackstone and the other pe funds have been lobbying hard to shape the Obama administration's stimulus package, now headed for the Senate, to extract maximum benefit from possible tax relief provisions on cancelled debt.

]]> http://www.iufdocuments.org/buyoutwatch/2009/01/wonderful_time_wish_you_were_h.html http://www.iufdocuments.org/buyoutwatch/2009/01/wonderful_time_wish_you_were_h.html Thu, 29 Jan 2009 16:05:43 +0000 Breaking Up is Hard to Do: Investors Fleeing PE Commitments Pay the Price Investors seeking to exit private equity commitments will pay a steep price, if Permira's terms set the standard.

]]> http://www.iufdocuments.org/buyoutwatch/2009/01/breaking_up_is_hard_to_do_inve.html http://www.iufdocuments.org/buyoutwatch/2009/01/breaking_up_is_hard_to_do_inve.html Permira Wed, 14 Jan 2009 18:17:55 +0000 Debt Drives Premier Foods, Largest UK Food Group, into the Arms of…Private Equity Struggling under a mountain of acquisition-induced debt, the UK's Premier Foods is reportedly seeking a large cash injection from private equity investors in order to shore up its wobbly capital structure and avoid breaching loan covenants.

]]> http://www.iufdocuments.org/buyoutwatch/2009/01/debt_drives_premier_foods_larg.html http://www.iufdocuments.org/buyoutwatch/2009/01/debt_drives_premier_foods_larg.html Tue, 13 Jan 2009 16:35:24 +0000 Leveraged Loan Bankers Say 50% of Companies on the Edge According to leveraged finance specialists gathered at the November 26 Debt Brief Europe conference in London (keynote theme: "Who will finance future deals?"), up to half of the companies taken private in the past three years face potentially serious problems with continuing to finance their debt.

]]> http://www.iufdocuments.org/buyoutwatch/2008/12/leveraged_loan_bankers_say_50.html http://www.iufdocuments.org/buyoutwatch/2008/12/leveraged_loan_bankers_say_50.html Thu, 04 Dec 2008 16:13:59 +0000 Investors Fleeing Credit Meltdown Selling Stakes in Buyout Funds Until very recently public and private employee pension funds were loading up on private equity in a relentless drive for above-market returns.

]]> http://www.iufdocuments.org/buyoutwatch/2008/12/investors_fleeing_credit_meltd.html http://www.iufdocuments.org/buyoutwatch/2008/12/investors_fleeing_credit_meltd.html Research & Analysis Mon, 01 Dec 2008 15:04:01 +0000 US Regulatory Changes Pave Way for Private Equity Funds to Acquire Failing Banks US private equity funds fleeing a dismal buyout scene with piles of uninvested cash have received a shot in the arm from regulatory changes enacted on November 28 which could feed their appetite for acquiring banks. Investment funds were previously limited by federal regulations to a 25% stake in banks but were prevented from owning them. Now the US Office of the Comptroller of the Currency (OCC) has skirted this by creating a "shelf charter" which would permit non-bank investors to form a bank holding company to become eligible for bidding on a full ownership stake in failing banks. The funds, after acquiring all the stock, could then run the banks the way they run their portfolio companies - with no shareholders to stand in the way.

While the OCC's head counsel declared that "Not just anybody can come in and get a charter", one investment group - Hilltop Holdings, backed by three private equity funds - has already received the first charter.

]]> http://www.iufdocuments.org/buyoutwatch/2008/12/us_regulatory_changes_pave_way.html http://www.iufdocuments.org/buyoutwatch/2008/12/us_regulatory_changes_pave_way.html Regulation/Political Action Mon, 01 Dec 2008 12:25:53 +0000 Norwegian Unions, IUF Call on Norway State Pension Fund: Just Say No to Private Equity, Hedge Funds The IUF and two Norwegian affiliates, the General Workers' Union Fellesforbundet and the Food and Allied Workers' union NNN, have publicly called on Norway's State Pension Fund to maintain existing restrictions on investing in private equity and hedge funds. The government fund, Norway's oil-funded sovereign wealth fund with some USD 300 billion in assets, does not currently invest in either private equity or hedge funds but maintains an ongoing discussion with regard to new investment classes. The fund is regarded as a standard-setter with regard to ethical investment, having disinvested from Wal-Mart (2006) in response to the company's record of labour and human rights violations, and more recently from mining giant Rio Tinto in response to the company's environmental destruction in Indonesia.

The letter, signed by the three organizations' general secretaries and sent to the Finance Ministry on November 29, outlines the risks to both investors and to the global financial system arising from heavily leveraged investments and stresses the destructive employment impact of private equity buyouts. Recalling the global standard-setting role of the Fund, the letter states: "Investment in private equity and hedge funds would take the State Pension Fund into areas which violate its basic principles, add to global financial instability, impact negatively on working people's lives and livelihoods and undermine the standard-setting role of the Fund. We strongly believe that opening even a limited percentage of the Fund's investments to these "alternative assets" would have a destructive impact globally.

"Any discussion of lifting the existing restrictions on investment in 'alternative assets' - which we understand to be ongoing - calls for extensive, wide-ranging public debate which can take into account the many-sided impact, today and tomorrow, of these investments."

The full text is available here.

]]> http://www.iufdocuments.org/buyoutwatch/2008/12/norwegian_unions_iuf_call_on_n.html http://www.iufdocuments.org/buyoutwatch/2008/12/norwegian_unions_iuf_call_on_n.html Regulation/Political Action Mon, 01 Dec 2008 10:42:36 +0000 PE Funds' Growing Stakes in Listed Companies, or How to Extract 2 + 20 Through the Stock Market Unable to deploy vast amounts of leverage under conditions of credit meltdown, private equity funds have increasingly turned to taking stakes in publicly listed companies. Alongside some spectacular recent forays (and spectacular investment failures) into the financial services sector - e.g. TPG's investment in Washington Mutual, or the J.C. Flowers-led consortium investment in Germany's Hypo Real Estate - Eurazeo (France's largest private equity fund) and Colony Capital continue to increase their coordinated stake in the French-based Accor Group.

]]> http://www.iufdocuments.org/buyoutwatch/2008/11/pe_funds_growing_stakes_in_lis.html http://www.iufdocuments.org/buyoutwatch/2008/11/pe_funds_growing_stakes_in_lis.html Mon, 03 Nov 2008 19:46:58 +0000