The IUF's Private Equity Buyout Watch

MF Global - canary in the (financial) coalmine?

Mon, 07 Nov 2011 09:32:27 +0000

The October 31 collapse into bankruptcy of MF Global, the US brokerage firm with investment bank appetites and ambition, was the eighth largest corporate bankruptcy in US history, behind Lehman Brothers, Enron and Washington Mutual but ahead of automaker Chrysler. As with any bankruptcy, clients are scrambling to recover their money, but large sums have gone missing.

Kraft and Private Equity Slash and Burn at UK’s Burton’s Biscuits

Thu, 24 Mar 2011 17:31:25 +0000

Burton’s Biscuits, the UK’s second largest biscuit manufacturer (after private equity-owned United Biscuits), has announced it will close its factory in Moreton, Merseyside, with the loss of 342 jobs, despite commitments to the union at the site that production would continue through May 2012. Workers at the plant, represented by Unite the Union, are being squeezed by two converging financial forces: transnational food giant Kraft, for whom Burton’s manufactures Cadbury biscuits and chocolate products, and Burton’s private equity owners.

EU Regulation of Private Equity: Results and Prospects

Thu, 13 Jan 2011 15:54:36 +0000

Following 18 months of negotiations, the first-ever legislative regulation of private equity through a binding Directive was adopted by the European Parliament at the close of last year and will come into effect in 2013. What’s in it for workers?

Blackstone surfs government Hilton subsidy to demand massive concessions from hotel workers

Tue, 09 Nov 2010 17:22:00 +0000

In a move which gives new meaning to “troubled asset recovery”, the Federal Reserve Bank of New York has gifted private equity giant Blackstone with USD 178 million. In early October, the Federal Reserve Bank of New York announced it had sold back to Blackstone USD 320 million in debt from the heavily leveraged 2007 Hilton buyout for just 142 million, booking a 56% loss. The difference between the face value of the debt – backed by Hilton properties – and the money taken in by the sale amounts to a USD 178 million public subsidy to the buyout house.

UN Special Rapporteur on the Right to Food Calls for Measures to Limit Food Commodities Speculation

Wed, 20 Oct 2010 17:21:07 +0000

Are we witnessing a replay of the 2008 hyperinflation in the price of basic foodstuffs which pushed hundreds of millions of people already living on the margins into the ranks of the acutely hungry? In the past three months, the price of corn futures on the Chicago Board of Trade has increased by 70%

Blackstone (& Friends) Buy Extended Stay Hotels - This Time at Half Price

Tue, 13 Jul 2010 17:52:36 +0000

Three months before becoming the world's largest hotelier (by rooms) with the 2007 leveraged buyout of Hilton Hotels Corporation, the private equity Blackstone Group unloaded the Extended Stay chain for USD 8 billion. It was a hell of a deal for Blackstone, who picked up the chain in 2004 for just under USD 2 billion.

Demerging Accor - Less Than the Sum of the Parts?

Tue, 18 May 2010 10:30:35 +0000

How many surprises can still be in store at Accor, the French-based hotel and prepaid services transnational? In 2009, when private equity investors Eurazeo and Colony Capital boosted their stake to 30%, it was described as a "vote of confidence" in existing management.

Blackmailing the Taxman, from Davos to Sydney

Wed, 03 Feb 2010 17:02:05 +0000

Blackstone Chairman Stephen Schwarzman, speaking from Davos, Switzerland, has warned Australia of a foreign investment "chill" following that country's efforts to collect taxes on a windfall deal from private equity giant TPG.

Kraft and Cadbury, Victors and Spoils

Mon, 01 Feb 2010 16:29:53 +0000

Barring any last-minute surprises, Kraft, the world's second-largest food company, will swallow UK-based Cadbury in a deal which in its reliance on debt bears a family resemblance to...a leveraged buyout.

Blackstone's Hilton Woes Will Weigh on Workers

Mon, 04 Jan 2010 08:26:09 +0000

Private equity operator Blackstone, according to the Wall Street Journal of October 29, "has good reason to be nervous about Hilton." They're not alone; the enormous leverage taken on to finance the buyout at the height of the debt bubble now weighs heavily on the more than one hundred thousand Hilton employees around the world, on the wider financial system, and on the US Treasury, and therefore US taxpayers. Here's why.

Recap Rerun: Short Memories, Missing Regulation

Thu, 03 Dec 2009 14:43:45 +0000

While defaults rise and growing numbers of private-equity backed companies continue their march to bankruptcy (though not necessarily losses for the funds which marched them there), the "creative" financial devices which helped fuel the buyout boom appear poised for a comeback.

IPO Blues

Thu, 05 Nov 2009 17:06:29 +0000

Private equity funds hoping to cash in on the stock market to return money to hungry investors through IPOs (initial stock offerings) may have hit a brick wall. What does this mean for workers?

Private Equity Pain for Education and Public Workers

Mon, 07 Sep 2009 13:27:23 +0000

The Next Debt Bubble? PE Fuels Subprime Microfinance in India

Mon, 31 Aug 2009 18:01:37 +0000

Microfinance, small business loans to the urban and rural poor, was originally conceived as a tool for poverty alleviation. It has become big business - and private equity has rushed in. The Wall Street Journal of August 13 reports that in India, private equity funds among other investors have "poured billions of dollars over the past few years into microfinance world-wide", using methods reminiscent of the aggressive, predatory lending which spawned the subprime debt bubble in the US. In India today, the article reports, "Some poor neighborhoods are being 'carpet-bombed' with loans" bearing interest of 24% to 39%.

US Pension Funds' Private Equity Disaster: Lost on the Road to Alphaville

Mon, 31 Aug 2009 14:51:06 +0000

New research from Bloomberg makes clear the magnitude of the private equity losses suffered by US employee pension funds in the period 2000-2008.