Private Equity Comeback

Is Private Equity Posed to Make a Comeback?

The private equity industry has suffered during the financial crisis, and as Julie Macintosh of the Financial Times says "things can't get much worse." The following CNBC video explores the question of when will the inevitable comeback occur, or has it already started? Experts are pointing to Treasury Secretary Timothy Geithner's plan to have public-private partnerships purchase toxic assets, giving private equity firms an opportunity to invest in struggling businesses. Click the image to watch the video:




Tags: private equity, private equity videos, private equity comeback, private equity valuation, private equity geithner, private equity ppip, private public partnerships

Link to This Resource: Private Equity Comeback

http://privateequityblogger.com/2009/05/private-equity-comeback.html

Information Technology Support & Management Services

Information Technology Services

Below please find a listing of firms which specialize in providing information technology services to hedge funds and investment firms.

Cloud 9 Technology specializes in helping Hedge Funds, Broker Dealers, Financial Advisors, and other small to mid size financial institutions save up to 50% on their current IT costs by migrating them to Cloud Computing based solutions. We can take your existing on-premise applications and servers and migrate them to the Cloud. We adhere to industry best practices and regulatory requirements such as Sarbanes-Oxley, SEC/FINRA , and FSA.

Call Cloud 9 at (212) 381- 4478 today, your Tri-State Cloud Computing Evangelists or visit our site www.cloud9technology.com

Eze Castle Integration’s fully managed suites in New York City’s Midtown bundle premier technology and business services with premium real estate to allow hedge funds and investment firms to become operational quickly and easily. Designed specifically to support the business and technology requirements of hedge funds and investment firms, Eze Managed Suites deliver simplicity, flexibility and convenience so clients can focus on their first priority — superior asset management and growth. Whether launching a new fund, expanding operations to New York or seeking permanent fully-managed space, Eze Castle’s suites include the services necessary to meet a firm’s short-term and long-term requirements. Eze Managed Suites are fully inclusive of business support, technology services and telecommunications.

For more information, please visit http://eci.com/services/EzeCastleSuites.php or contact Vinod Paul at vpaul@eci.com.


Tags: Information Technology Services, Information Technology Support Services, Information Technology Management Services, IT Services for Hedge Fund Managers

Link to This Resource: Information Technology Support & Management Services

http://privateequityblogger.com/2009/05/information-technology-support.html

Private Equity Startup Event | Managers Needed

Private Equity Startup Event

We are putting together a panel for an investment fund startup up event scheduled for June 18th, 2009.

We are looking for a private equity fund manager who would like to be on a panel sharing startup stories with other small hedge fund managers. We are looking for tips on forming a fund, raising capital, hiring talent and wearing multiple hats while running a private equity fund business.

If you are a private equity fund with less than a 5 year track record and under $100M in assets under management please email me directly at Richard@HedgeFundgroup.org.




Tags: Private Equity Fund Startups, Private Equity Event, private equity, Starting a private equity firm

Link to This Resource: Private Equity Startup Event | Managers Needed

http://privateequityblogger.com/2009/05/private-equity-startup-event-managers.html

Private Equity in Asia

Asia-Focused Private Equity Fundraising Surges

Private equity funds focused in Asia defied the financial crisis, raising capital at record levels in 2008. The funds raised increased from US$40.1 billion in 2007 to US$48 billion in 2008. Despite the big boost in fundraising, deal volume for Asia-focused private equity funds is very low compared to a year ago.

The total deal volume for private equity firms in the Asia Pacific region was US$2.18 billion in the first quarter. This is significant compared with the same period a year earlier when deal volume totaled US$10.24 billion. Thomas Britt, partner at Debevoise & Plimpton LLP in Hong Kong, explains that firms are waiting for a good deal to come along. Britt said, "Companies see this as a once in a generation buying opportunity. They feel like time is on their side so there are not numerous bidders."

The Wall Street Journal has more:

Asian private equity players say they're busy eyeing deals but that valuations, while lower, still have a way to go down. Deal sizes have gotten smaller - partly a reflection of lower prices. The average private equity deal size was US$62 million in the first quarter, compared with US$70.14 million in the first quarter last year.

...Funds are also getting pressure from investors to hold off from drawing capital for investments. That means even funds that spot good deals in the market face difficulties accessing enough capital to make investments.

Pension funds and endowments have been squeezed by losses incurred by the downtrodden markets. The largest U.S. public pension fund, the $179.2 billion California Public Employees' Retirement System, or Calpers, has asked private-equity firms to ease off on requests for additional capital it had previously committed to deliver. More recently, TPG allowed investors of its US$4 billion Asia fund to reduce commitments by 10%.

Instead of deals, fund managers in the region say they've been spending more time working with companies already in their portfolios. Firms such as Kroll report more demand for post-transaction investigations as private equity firms check up on companies in their existing portfolios. Speaking at the Private Equity International Forum conference in Hong Kong last month, X.D. Yang, managing director at Carlyle, and Yichen Zhang of Citic Capital, estimated they've been spending about 70% of their time looking at new deals, compared with 90% a year ago.

Tags: Private Equity Funds, Private Equity Asia, Asian Private Equity, Asian Private Equity Funds, Private Equity Asian Pacific, Private Equity Fundraising

Link to This Resource: Private Equity in Asia

http://privateequityblogger.com/2009/05/private-equity-in-asia.html

Private Equity Institutional Investors

Private Equity Institutional Investors Willing to Wait

Private equity investors are willing to wait at least a year or two before selling, according to the latest investor survey.

Preqin, Inc. has conducted a survey of private equity investors and found that most are willing to wait at least a year before turning to the secondary market. Of the 568 private equity institutional investors that were surveyed, 11% said they wanted to sell their stake on the secondary market. Of those who are looking to sell on the secondary market, just 10% plan to sell immediately; 43% want to sell within the next 12 months; and 47% expect to sell in 12 to 24 months.

Private equity investors--especially the larger partners like pension and endowment funds-- typically commit for the life of the fund. But the economic recession and plummeting asset values is hurting the investors' portfolios and forcing some investors to sell their interests in the fund--even for a much lower price.

Investors considering selling their shares are "being put off" by the big gap between asking prices and net asset values which has led many potential buys and sellers from making a deal on the secondary market.

Preqin commented, "Only those with an extremely distressed portfolio will be willing to exit investments at today's prices."

Source

Tags: private equity market, private equity valuation, private equity investors, private equity institutional investors, private equity secondary market, private equity preqin

Link to This Resource: Private Equity Institutional Investors

http://privateequityblogger.com/2009/05/private-equity-institutional-investors.html

Carlyle Group New York

Carlyle Group Settles with New York in Pension Scandal

The Carlyle Group will pay $20 million and reform its practices in order to settle with New York's state attorney general Anthony Cuomo. The inquiry centers around the use of middlemen by private equity firms and hedge funds to secure investments from public pension funds.

Under the settlement, the Carlyle Group agrees to discontinue its use of intermediaries to gain access to public pension funds nationwide. Also, Carlyle must reduce its contributions to politicians who oversee pension funds. In return, Mr. Cuomo's office will not penalize the firm or any of its executives. The deal aims at reforming the interactions between private equity and hedge funds with all public pension funds.

Mr. Cuomo said of the settlement: “This is a revolutionary agreement. I believe it totally changes the way people operate: It ends pay-to-play, it bans the selling of access, it puts the political power brokers out of business.”

Christopher W. Ullman, spokesman for the Carlyle Group stated, “We are pleased to announce today that we have reached a successful resolution with the attorney general and strongly support his efforts to implement reforms that usher in a new era of transparency and accountability into the pension fund investment process.” (NYT)

For more information on the investigation please see this article.

Tags: New York Attorney General, Anthony Cuomo, New York Pension Fund, Pension Funds and Private Equity, New York Pension Fund, Carlyle Group Pension Fund, Carlyle Group New York

Link to This Resource: Carlyle Group New York

http://privateequityblogger.com/2009/05/carlyle-group-new-york.html

Venture Buyout

Understanding "Venture Buyouts"

Venture buyout is a relatively new term (apparently coined by Harvard Management Company's Peter Dolan) which describes what some consider an emerging new asset class that combines elements of venture capital and private equity buyouts. A venture buyout firm seeks to fill a void by investing in middle-stage companies that traditional buyout funds and venture capitalists pass over.

Venture buyouts can be seen as an alternative to venture capital that is invested in startup companies trying to expand because a venture buyout somewhat sidesteps the early stage of a business and takes over an existing small company. This is also an alternative to traditional large buyouts because it requires less capital and targets more entrepreneurial companies.

A venture buyout fund typically collects capital from limited partners to buyout a small later-stage company. The targets are similar to the firms that venture capitalists invest in but the venture buyout is unique because it seeks to "carve out" a startup business like a private equity buyout while maintaining the entrepreneurial aspect of venture capital. The venture buyout may buy up a smaller company and try to increase its value and to turn it around by fixing management or operations problems.

Some venture capitalists have turned to the buyout model to diversify their portfolio with a more established middle-stage company, to counter its high-risk entrepreneurial ventures. While buyouts typically hold a company for about 5-7 years, a venture buyout would try to improve the business in a much shorter time. Although the venture aspect means that venture buyouts have some risk, the funds typically use less leverage than a large buyout because the buyout targets are smaller companies. Also, venture buyouts groups--because they are relatively small compared to the large buyout firms-- will usually take on less companies in their portfolios than larger private equity buyout firms would.

Here is a video from Yahoo Finance about venture buyouts:

Tags: venture buyouts, venture capital, venture capital buyouts, venture capital investing, venture buyouts tech, venture buyouts definition, venture capitalists buyouts, venture management buyouts

Link to This Resource: Venture Buyout

http://privateequityblogger.com/2009/05/venture-buyout.html

Blackstone Group Investment

The Blackstone Group's Recovering in Q1 2009

The Blackstone Group, one of the largest private equity firms, can be seen as a barometer for the private equity industry. The firm has weathered almost a quarter of a century in private equity although this recession has proved difficult for even the most experienced private equity groups. Blackstone Group appears to be recovering although it still posted a negative economic net income.

Considering that in the last quarter of 2008 the company posted a net economic income loss of $827 million, it is good news that the Blackstone Group (BX) only had a $93 million loss in 1Q 2009. Another positive sign was the total segment revenue of $48 million in the first quarter this year, a big boost from -$621.4 million in the previous quarter. Net fee related earnings from operations improved by 32% from the first quarter of last year to this year. During the same period of time, adjusted cash flows from operations went from $-4 million in Q1 2008 to positive $75 million in Q1 2009.

Like many of the major private equity firms, Blackstone also seems to be sitting on a good deal of cash with $776.3 million in available cash and $400.1 million invested in liquid Blackstone funds.

Source


Tags: Private equity, blackstone group, bx, blackstone, blackstone group llc, blackstone group report, blackstone group 2009, blackstone group stephen schwarzman, blackstone group investment

Link to This Resource: Blackstone Group Investment

http://privateequityblogger.com/2009/05/blackstone-group-investment.html

Private Equity Fundraising in April

Private Equity Raises $30 Billion in April Surge

Here is just a quick bit of good news: last month private equity firms raised about $30 billion in new capital commitments. This is a strong showing by private equity firms--helped in large part by secondary funds--in an otherwise dismal beginning of this year. In the end of April, private equity funds focused on fund-of-funds contributed significantly to the fundraising boost. Here is the data for the big fundraising push at the end of April:


As the Deal points out, this is especially good news for leveraged buyouts which have seen a decline in capital from their usual sources (pension funds and endowments). The money pouring into fund-of-funds offer a viable funding alternative for future LBO funds. The largest funds-of-funds were closed by Siguler Guff Co. LLC, Morgan Stanley Investment Management and Abbott Capital Management each raising vehicles of $2.4 billion, $1.14 billion, and $1 billion, respectively.

Here's another look from Deal Pipeline showing the biggest deals in April 2009:

Again, the fundraising boom in April was mainly powered by the very active secondary market. With the uncertain economy and many investors suffering major losses, private investors are now more willing to sell their stakes in private equity and venture capital at a significant markdown. Private equity could do with a few more months of fundraising like April.



Tags: Private equity fundraising, private equity april 2009, private equity economy, private equity secondary market, fund of funds, private fund of funds

Link to This Resource: Private Equity Fundraising in April

http://privateequityblogger.com/2009/05/private-equity-fundraising-in-april.html

Family Office Directory | Contact Details of Family Offices

Family Office Directory

How to choose a directory of family offices:

When selecting a directory or database of family offices to purchase there are 4 points to consider or investigate before making a purchase. By following these tips you will avoid purchasing something built for a different audience, working with information that is largely outdated or receiving data which has not been thoroughly prepared for commercial use with Excel or common CRP systems.

Top 4 Tips for Family Office Directory Selection

1. Length: Many family office directories come with 400 to 1,500 total contacts. In the last year how many firms has your team had time to effectively reach out to? 400? 800? Do you only speak with family offices while marketing your products? While it may be nice to obtain a directory of 1,000+ family offices make sure you don’t pay too much for a database built for a Fortune 500 company instead of a small team of 3-5 marketing and relationship development professionals. Often times just 300-900 contacts may be more than enough to expand your firm’s reach within this industry

2. Statistics Matter: Ask the owner of the family office directory for the percentage of contacts which come with email addresses AND phone numbers. Many databases have poor data quality and only 60-70% of their contacts even list a single email address for the firm. Look for 80-90%+ of listings to have both an email address and phone number for each firm.

3. Price < $1,000: Hiring professionals to efficiently use a database of family office contacts can be expensive; don’t spend more than $1,000 on your directory of family offices. It does take hundreds of hours to build a great product within this space but any firm selling such a product could make you a deal and sell a version of the database to you for $700-$900.

4. Check the Source: Who is providing the database of family offices? It is a firm which naturally speaks with family offices day-to-day? Can the professionals behind the product provide advice on how to approach family offices and HNW wealth management firms? The quality of the organization behind the product can often give you clues as to how valuable their end family office directory product may be. A quick example: The Family Offices Group is a family office networking association of 5,000 plus professionals. Due to their day-to-day contact with family offices and the firm’s history in raising assets from family office investors they know how to create a valuable directory of contact details on firms in the industry.

- Adriana

Adriana Albuquerque is the Managing Director of the Family Offices Group and responsible for developing the associated directory of family offices. To learn more please see FamilyOfficesDatabase.com.

Related To:

• Family Office Directory
• Family Office List

Tags: Family Office Directory, family offices directory, directories of family offices, directory of family offices, family office, family offices

Link to This Resource: Family Office Directory | Contact Details of Family Offices

http://privateequityblogger.com/2009/05/family-office-directory-contact-details.html

Stephen A. Schwarzman

Video: Blackstone Group's Stephen A. Schwarzman

Stephen A. Schwarzman is the chairman and co-founder of the Blackstone Group. It is not often that private equity leaders will speak for over an hour with university students, but this is the second video of Mr. Schwarzman in this setting. He talks about the challenges of heading a major private equity firm in the current financial crisis. Mr. Schwarzman also provides career advice for his Yale student audience.






Tags: Private equity videos, private equity stephen schwarzman, stephen schwarztman, steven schwarzman, stephen schwarzman blackstone group

Link to This Resource: Stephen A. Schwarzman

http://privateequityblogger.com/2009/05/stephen-schwarzman.html

Facebook Valuation

Private Equity Firms and Facebook in Valuation Talks

Facebook, Inc. is talking with private equity firms about the possibility of another round of fund-raising. The social networking site is said to be looking for funding from several private equity firms including Providence Equity Partners, General Atlantic, Bain Capital, and Kohlberg Kravis Roberts.

The discussions are described as casual and no term sheet has been drawn up. According to the Post, the private equity firms and Facebook, Inc. are having trouble agreeing on what the company is worth. Facebook believes its value is somewhere between $5 and $6 billion while private equity groups see it as much lower--about $2 and $3 billion.

Facebook COO Sheryl Sandberg said, "We absolutely do not need to take money. We might take money, but it doesn't mean we need to." Although Sandberg denies that they need capital, some sources have suggest that's not exactly true:

"Facebook is looking for dumb money, but there's none of it out there anymore," said one source who was approached by the company.

Added another source, "It's a new era and funds, even growth funds, are being much more conservative with their investments." The Post

People familiar with Facebook's funding situation said that the firm's attempt to raise new capital has brought tension with current investors. Its current investors include: Accel Partners, Greylock Partners, Meritech Capital Partners, Microsoft and angel investor Peter Thiel. The investors are said to oppose the fundraising round because it would dillute their stake in the company.

After investing more than $400 million into the company, private investors are hoping to generate profits off the site's users. The social network has grown to at least 200 million worldwide and the investors see this as a lucrative opportunity to cash in on its popularity.

Sandberg expects Facebook to boost revenue by 70% this year and it is on track to be cash-flow positive next year.


Tags: Facebook investors, facebook private equity, facebook buyout, facebook private equity, facebook investing, facebook private investors, private equity investing facebook, facebook inc.

Link to This Resource: Facebook Valuation

http://privateequityblogger.com/2009/05/facebook-valuation.html