Technology M&A

Technology M&A

Is Technology M&A at a Tipping Point? | Video

Jeff Bistrong, managing director with the middle-market-focused investment bank Harris Williams & Co, says that lending is getting better in the middle market.  Bistrong talks specifically of a technology M&A being at a tipping point, with stock prices rising and more interested buyers.  E-mail subscribers can watch the video here:





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Tags: technology m&a, m&a, tech mergers and acquisitions, technology, tech investments, technology buyouts, technology 2009, videos, private equity videos

Link to This Resource: Technology M&A

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Private Equity Managers 1 Year

Private Equity Managers 1 Year

Bill Proposes Giving Buyout Managers 1 Year to Register


The House Financial Services Committee has passed a bill that will give alternative asset managers--including private equity fund managers--one year to register with Securities and Exchange Commission.  The drafter of the proposal said that the grace period is necessary because both fund managers and the SEC will need time to prepare for the new work required for registering and examining the funds. 
Hedge-fund managers and private-equity managers would be given a one-year transitional period before being required to register and open up their books to periodic examinations by the Securities and Exchange Commission, according to a measure approved by the House Financial Services Committee on Tuesday. Rep. Susan Kosmas, D-Fla., the drafter of the measure, said a one-year transition period for registration is necessary because both the SEC and fund managers will need time to organize themselves. "The SEC will need time to prepare for the additional responsibilities that will come from the registration of potentially thousands of new managers," said Kosmas. She added that managers will need time to set up formal compliance programs, hire chief compliance officers, all of which is required by the legislation.   Source


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Tags: private equity managers, private equity fund management, private equity assets, buyout managers, registering with the SEC, compliance regulation, private equity compliance

Link to This Resource: Private Equity Managers 1 Year

http://privateequityblogger.com/2009/10/private-equity-managers-1-year.html

Private Equity North Africa

Private Equity North Africa

New Opportunities for Private Equity in North Africa


Local businesses in some north African countries have picked a poor time to seek private equity investment.  While many private equity firms are interested in investing in the area, the financial turmoil has led most buyout groups to hold back from making new deals.

The demand for outside capital is largely a result of incentives for businesses located in North African nations including Tunisia, Morrocco and Egypt.  The region is becoming a more attractive destination for companies because of tax breaks, cut price land deals and new free trade zones.  Unfortunately, these pro-business reforms have come at a time when few private equity firms are interested in new ventures.
 
"There is lack of funding for these relocations, yet people want to do it more and more. It's a paradox," said Dekli.  Delegates at the Euromed Capital Forum said the global downturn had not interrupted a trend for north African family-run firms to seek foreign expertise and capital to grow.
 
Algeria, seen as tough for foreign investors outside the dominant energy sector, announced its first capital development fund set up by bank BEA in cooperation with Portugal's Banco Espirito Santo and French capital investment group Siparex.


Barriers to trade and investment across the region have stymied economic integration -- political tensions have shut the border between Morocco and Algeria for more than a decade.  Yet some firms backed by venture capital are starting to expand across the region...Private equity is hoping for a growing role in state-led projects for roads, railways, ports, health and education.   
Read whole article here.
Read more about Private Equity in Africa


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Tags: private equity north africa, northern africa, private equity in Africa, North Africa private equity, firms, investment, foreign investment, north africa business

Link to This Resource: Private Equity North Africa

http://privateequityblogger.com/2009/10/private-equity-north-africa.html

Boston Hedge Fund Networking Event Thursday 10.29.09

Boston Hedge Fund Event




Our next networking event is coming up quickly, this Thursday we are hosting 3 speakers for short 15 minute discussions on hedge fund compliance, capital raising strategies, and pending regulations.  We will then have 1 hour and 15 minutes of open networking time with food and drinks provided to attendees.


What: Hedge Fund Group and Hedge Fund Premium are hosting a seminar networking event in downtown Boston.

When: Thursday October 29th, 2009 6-8PM EST

Location:  U Mass Club in downtown Boston at 225 Franklin Street, 33rd Floor Boston, MA 02110.

Sponsors:  Malik Law Group & Armor Compliance

Entrance Fee: Waived, our sponsors have covered the costs of this event and not entrance fee will be required for this Boston event.

Speakers:

Tanya L. Goins, Malik Law Group:  Harvard Alumna, Tanya L. Goins, Esq., of Malik Law Group comes back to Boston to speak about recent regulatory and industry developments affecting hedge fund managers.



Richard Wilson, Hedge Fund Group:  Richard will speak about copywriting capital raising, how fund 
managers can write more effective sales letters and improve their email marketing.



Douglas F. MacLean, Armor Compliance:   Douglas will speak about the Private Fund Investment Advisers Registration Act of 2009, which will soon require hedge fund managers managing more than $30 million to register under the Investment Advisers Act, appoint a chief compliance officer and implement a compliance manual.


Tags: Boston hedge fund premium event, hedge fund premium event in Boston, hedge fund networking events in Boston MA, Boston hedge fund manager networking

Link to This Resource: Boston Hedge Fund Networking Event Thursday 10.29.09

http://privateequityblogger.com/2009/10/boston-hedge-fund-networking-event.html

Private Equity Blogger Poll Results

Private Equity Blogger Poll Results

Private Equity Blogger Poll on Reader Interest Results

I have ended the PrivateEquityBlogger.com readers poll after a month and I want to say thank you to all those who responded.  This website is a service to those interested in private equity and I wanted to know what readers would like to see more of in this blog.  Your response was the following (e-mail subscribers click here for results):

Fundraising and marketing articles
  23 (44%)

Data and trends in the private equity industry
  21 (40%)

Private equity career-related articles
  18 (34%)

Up-to-date news and activity in the private equity industry
  15 (28%)

Educational articles about the private equity industry
  16 (30%)



According to the poll, readers would like me to cover fundraising and marketing articles and pay the least attention to following the news.  This makes sense considering most private equity professionals are less interested in current news surrounding other firms.  I will still mention any news stories I come across which are valuable, but I will reserve most firm-specific stories for the Private Equity Tracker Tool profiles. 

I'm encouraged by the great following this blog has attracted and any feedback is welcome, just send me an e-mail to Theo@PEblogger.com (I'll try to respond as quick as I can).


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Tags:  private equity poll, private equity tracker, private equity investors, career, blog, privateequityblogger.com, private equity blog, buyout blog

Link to This Resource: Private Equity Blogger Poll Results

http://privateequityblogger.com/2009/10/private-equity-blogger-poll-results.html

Japan Buyout

Japan Buyout

Buyout Firms May Have to Think Smaller in Japan


Japanese companies have often resisted private equity deals but, despite the slow-moving process,  the buyout industry is gaining ground in the country.  Big buyout shops have opened up offices in Tokyo, firms including KKR, Carlyle, TPG and Cerberus.  While these heavyweight private equity firms are increasingly frustrated with companies in Japan, they may be thinking too big, according to Tokyo-based Ant Capital. 

Ant Capital has been able to sell 5 of its portfolio companies just in the last year and recently purchased VarioSecure Networks for $5.7 million.  The firm targets companies valued at less than $200 million in enterprise value.   According to the Center for Asia Private Equity Research, smaller deals have generated better returns for buyout firms in Japan.
"Basically small cap is undervalued because of its non-profile. To be small caps means they are discounted already," Ozaki [CEO at Ant Capital] said at the Hong Kong conference.

The market for private equity in Japan has indeed looked unappetizing.  The value of acquisitions in Japan by private equity firms fell to $8.8 billion last year from $21.2 billion in 2007, according to Thomson Reuters data. That is just $1.7 billion so far this year.  But targeting smaller transactions may indeed be the right strategy, as 94 percent of Japan's roughly 3,000 M&A transactions were worth less than $100 million last year, according to Thomson Reuters. 

Some 33 deals completed from 2004 through the end of June this year have showed transactions for companies with market value between $100 million and $500 million had an internal rate of return of 19.6 percent. That compared with an 8.7 percent internal return on companies with more than $1 billion market value.   Source



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Tags: japan, japanese companies, private equity japan, alternative investment in Japan, Japan buyouts, buyout industry in Japan, returns, enterprise value, ant capital

Link to This Resource: Japan Buyout

http://privateequityblogger.com/2009/10/japan-buyout.html

Private Equity India Video

Private Equity India Video

Video: Private Equity Firms and Companies in India

Private equity is developing a strong base in India, despite a drop in investment during the recession.  More and more foreign private equity firms are looking to get a share of the fast-growing Indian economy.  There is a lot of interest in current private companies going public but it is a difficult environment to raise funds and execute new deals.  Here is a great video overview from PEI's forum in India.   I have covered private equity in India previously, be sure to check out these other stories and resources:
E-mail subscribers click here for Part 1 of Private Equity India Video:



Part 2 of Private Equity India Video, this segment focuses more on entrepreneurs and venture capital in India.





Read about Private Equity India Companies
Learn about the increase in India family offices
Guide to Private Equity India
Value of Private Equity Deals in India Drops
Private Equity Boom in India


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Tags: private equity india, private equity guide to India, Indian private equity, india buyout, entrepreneurs in India, india private equity video, video on India private equity

Link to This Resource: Private Equity India Video

http://privateequityblogger.com/2009/10/private-equity-india-video.html

EU Alternative Investment Regulation

EU Alternative Investment Regulation

EU's Directive May Cost Alternative Firms £2.9 billion


The European Union's new bill, the Directive on Alternative Investment Fund Managers, is expected to cost hedge funds and private equity firms up to £2.9 billion ($4.7 billion).  Also, alternative investment firms will have to shoulder annual costs estimated around £283 ($463 million).

The combination of a costly registration, having to adhere to greater disclosure requirements, and the limiting of leverage make for a harsh legislation targeting alternative assets that could have significant effect on other industries as well.  Private equity firms are expected to pay the most in annual costs complying with the Directive.

The study, conducted by Charles River Associates for City watchdog the FSA, also said the affected firms would be hit with annual costs of around €311m.   The EU is planning to force fund managers to sign up to a costly registration and disclosure regime, and to adhere to caps on leverage.
Hedge funds would bear the brunt, paying €1.4bn in one-off costs to comply with the directive.  Private equity firms face one-off costs of up to €756m, but they would bear the largest ongoing costs, totalling €248m a year, the study found.  And the report said that pension funds would be £1bn a year worse-off under the EU proposals.  Source



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Tags: alternative assets, alternative investment fund managers, fund management rules, european union alternative assets, eu directive, european union compliance laws

Link to This Resource: EU Alternative Investment Regulation

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William Edwards Deming

William Edwards Deming



Below is a short guest post from Richard Wilson at HedgeFundBlogger.com.

One person who has affected me in business has been William Edward Deming.  He has a quote that says "If you can't describe what you are doing as a process, you don't know what you are doing"  

I think this also goes along with another popular business quotes "What gets documented gets improved"

Most investment funds and family offices that I have worked with do not have an investor cultivation process or pipeline drawn out as a process. They do not have their ongoing investor communication strategy documented, and in many places the only documentation of their investment process is at a very high level within their marketing materials.  I think many hedge funds, portfolio managers and capital raisers could benefit from using PowerPoint or a free program such as Bubbl to document their processes.

This documenting of critical processes takes little time and costs nothing to do but allows you to step back from the process and evaluate it, improve it, or delegate where appropriate.  Our firm recently used Bubbl and PowerPoint together to describe a business process we were completing ourselves and we were able to not only use this internally but also externally as we trained a third party that we decided to outsource some of this work to.

The processes I have found to be valuable to document are:
  • Investor Acquisition Process
  • Current Investor Communication Strategy
  • Hiring New Employees
  • Managing your portfolio on an ongoing basis

Tags: William Edwards Deming Quotes, Quote by Edward Deming, W. Edward Deming, Quality Management and process improvement tips, documenting business processes for improvement

Link to This Resource: William Edwards Deming

http://privateequityblogger.com/2009/10/william-edwards-deming.html

Private Equity Name Change

Private Equity Name Change

Should Private Equity Change Its Name?


There's no question that the private equity industry is changing following the credit crisis, but is a name change in order?  David Rubenstein of Carlyle Group has proposed "change capital" or "value-added equity."  The buyout industry has slowly moved away from the term "leveraged buyout" presumably after the financial crisis has been at least partly attributed to over-leveraged investment firms.

Now, with a greater push toward transparency, "private" isn't exactly an ideal association.  If private equity firms hope to adapt to the evolving market and changing public perception it has to be more than a surface makeover.

BreakingViews has a couple name suggestions to add:
"Underwater equity," for instance. The historical record of the private equity business is pretty good. The better firms have delivered high returns for pension funds, college endowments and other investors.

Or how about "fee-squared capital?" Private equity firms may make money investors, but not before raking off plenty themselves. Rubenstein, for instance, was recently ranked at number 123 on the Forbes 400 list of the richest Americans.

Or just maybe "Pupa equity." It sounds like something leading to a transformation. But it stands for "private until public again." Buyout firms like to tout the value of taking a company off the public market.  Source

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Tags: private equity name, leveraged buyout, leveraged buyouts, buyout industry, industry name, what is private equity, private equity name change, lbo, buyout name, name of private equity

Link to This Resource: Private Equity Name Change

http://privateequityblogger.com/2009/10/private-equity-name-change.html

Achieving Your Goal

Achieving Your Goal

The Power of Focus in Achieving Your Goals


Richard Wilson of the Hedge Fund Certification Program and Hedge Fund Blogger recently told me a story from a conference he attended.  This lesson is applicable to any goal, from capital raising to opening a private equity firm.
Last week, I was speaking with an investment fund manager who was looking to raise capital and they were doing so by approaching every investor they could possibly speak to.  They were explaining how their firm has so little resources compared to their $1B competitors.  I recalled the following quote: 

“You can take a $5 disposable camera and take it out of the box, stand 10 feet from a building and take a great picture that will be developed and look good if not great. You could stand in that same position with a $10,000 camera with every gadget, lens, and a tripod and it will not take as good of a picture if you do not do one thing, focus.”  - Brian Tracy

The Point: You can beat your competition with a smaller staff, with less financial resources, and less experience if you just learn to focus. Focus on your top prospect investors, focus on local potential investors, and focus exclusively on the types of investors which are most likely to make allocations to your fund. If you can dial-in on these three areas your hot prospect list, local investors and the right investor mix (family offices, wealth management, pension funds, etc.), than you can really cover a lot of ground quickly.

I've worked with Richard for years and he is a testament to the power of focus.  I gave similar advice to an aspiring private equity professional at a conference in New York last month.  He was doing a great job of actively networking.  Instead of waiting for professionals to initiate a conversation, he was reaching out to everyone at the table.  I could tell he was a little discouraged as people were less than enthralled by an eager young professional looking for work, and he asked me "How do you think I'm doing?"  I told him that it almost always takes hundreds of rejections to get that dream job, that great sale or to achieve any other goal you set for yourself.  We hear this all the time growing up, but too often we still look for the easiest path. 

Set a difficult but attainable goal for yourself and achieve it, whether it is to raise more capital or to advance yourself in a PE firm.  Focusing on this goal means not getting caught up looking for easier solutions to come about or waiting help from someone else.  I have every confidence that the person I was speaking with at the conference can find a great job in private equity if he doggedly pursues that goal.  


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Tags: private equity conference, private equity goals, marketing, career advice, finding a job in private equity, private equity career, private equity jobs, private equity work

Link to This Resource: Achieving Your Goal

http://privateequityblogger.com/2009/10/achieving-your-goal.html

Blackstone Vs KKR

Blackstone Vs KKR

KKR Joining Blackstone & Other Public Buyout Firms


KKR's recent merger with its Amsterdam affiliate, KKR Private Equity Investors, makes the private equity firm one of the few publicly traded ones.  As the buyout shop plans to become listed on the New York Stock Exchange, BreakingViews has made an important comparison between KKR and another publicly-listed titan of the industry, Blackstone Group.

I am providing a the link to the article because it's difficult to condense, so it's best to just read it here.  The main focus of the comparison is the valuation gap between the two private equity firms and concludes with an optimistic prediction of KKR's valuation when it is listed in New York and more investors have access to the firm.  Read the article here.


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Tags: Blackstone Vs KKR, blackstone group, kkr, private equity publicly listed, public private equity firms, euronext, new york stock exchange, private equity kkr, kohlberg kravis roberts and company

Link to This Resource: Blackstone Vs KKR

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Institutional Investors Mandates

Institutional Investors Mandates

Stanford & London Pension Fund Looking to Private Equity


This week, two large institutional investors showed an interest in investing in private equity.  First, the London Pension Fund Authority's CEO announced that the fund is seeking investment opportunities in private equity and infrastructure.  As of June 2009, the London pension fund's assets are divided between 2.1 billion pound ($3.3 billion) in an active fund primarily invested in global equity and 1.1 billion pound ($1.74 billion) in a "sub-fund" which invests more conservatives and is used to pay out pensions.   Now, private equity firms will compete for a share of the fund's total assets, in excess of $5 billion.  At the end of June, the pension fund had 9% of its assets invested in private equity.
Chief Michael Taylor wants the active fund to use some of its cash, worth 7 percent of its assets.
"We are looking for investment in private equity and infrastructure, but the problem is that there has been precious little distribution at the moment; not a lot of IPOs and little trade in that area," he said.

As part of the same cash redeployment, the LPFA has invested 20 million pounds in the Prudential (PRU.L) M&G UK Comapanies Financing fund, which will make loans to sound UK companies stymied by a lack of bank lending.

The scheme may invest a further 30 million pounds if M&G hits the 2 billion pounds target.
The fund has so far gathered 1.3 billion pounds and its total assets may rise to 1.6 billion pounds after its third closing. The fund has not yet made any loans, said M&G's fixed income chief investment officer Simon Pilcher.   Source

Stanford also showed interest in investing more in private equity.  The university's endowment fund is looking to private equity firms to take some $1 billion of its $14.5 billion in assets.
Although the story became public in the past few days, university finance officials have been conversing with major private equity firms on the matter for several weeks, I'm told. They wouldn't say who, or if there are any takers yet. "We're testing the market," said one official, who hastened to add, "We're not in a liquidity crisis. We're just looking to balance our portfolio."

Said portfolio hasn't been very good to Stanford of late. As of the year ending June 30, it was down 25.9 percent from the previous year, according to the Stanford Management Co., which manages the portfolio.   Source

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Tags:  private equity, institutional mandates, institutional fund mandates, fund mandates, private equity mandates, private equity fund investments, investment opportunities, capital calls

Link to This Resource: Institutional Investors Mandates

http://privateequityblogger.com/2009/10/institutional-investors-mandates.html

Family Office Book

Family Office Book

Free Downloadable Book on Family Offices

This website is build as a free resource to help educate and update readers on the private equity industry.  I understand some readers are students and are hesitant to pay for information so I keep an eye out for free or discounted materials.   My friend Richard Wilson at FamilyOfficesGroup.com has put together a free collection of writings and data on the family offices industry, a valuable source of capital for private equity and venture capital funds. 



The Family Office Report

The Family Office Report is a 65 page e-book on single and multi-family offices. If you are looking to learn more about family offices this guide will help you understand the family office industry.  The Family Office Report was produced by the Family Offices Group, has a $250 value and is now free to download through completing the form below.


Benefits of Reading the Family Office Report:


  • Grow More Effective Family Office Relationships
  • Better understand Trends Affecting Family Offices
  • Learn more about the services offered by single and multi-family offices
  • Raise more capital from HNW wealth management firms and family office institutions
  • Position your firm or career in line with family office trends and industry challenges



Download the Family Office Report by typing in your first name and primary email address below:






Related to Free Family Office Book: The Family Office Report

Link to This Resource: Family Office Book

http://privateequityblogger.com/2009/10/family-office-book.html

Private Equity Fundraising

 Private Equity Fundraising

Update on Private Equity Fundraising in Q3 2009

Fundraising is still in the doldrums as an estimated 90 funds stopped their fundraising process entirely and many funds have lowered their target amounts.   Fundraising fell to a six-year low in Q3 2009.  Surely some of the drop in fundraising is private equity managers hesitating to throw their hat in the ring while the economy is still unstable, but investors are not making new commitments--probably for the same reason.  In a recent Preqin survey, only 41% of surveyed investors reported making a new fund commitment in the first half of 2009.

Although private equity firms are having trouble raising capital, the survey found that the majority of PE funds are hoping to make new private equity investments in 2009.  54% of firms surveyed said they expect to make new deals this year and 25% plan to invest in 2010. 

As the graph below shows, private equity fundraising fell yet again, to its lowest point in six years at $38 billion (45% drop from last quarter).



For the full fundraising data see this PR


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Tags: private equity fundraising, fundraising quarter 3, private equity fund raising, private equity firms, raising money from private equity, raising capital for private equity firms, fund marketing

Link to This Resource: Private Equity Fundraising

http://privateequityblogger.com/2009/10/private-equity-fundraising.html
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