Private Equity Corporations

Private Equity Corporation

Private Equity Firms Look to Corporate Division Primary Deals

Private equity firms looking for new deals are increasingly turning to corporate divisions.  Instead of buying out whole corporations, private equity firms are buying out corporate divisions such as GlaxoSmithKline's (GSK.L) non-prescription drugs, fashion group PPR's (PRTP.PA) catalogues and online retail division Redcats, and Oberthur's (FCOFDO.UL) smart cards business.  Private equity firms are not the only ones trying to make these type of deals, they are also facing competition from corporate rivals.

For private equity, the rewards can be greater than with companies that pass from one firm to another: the buyer can have the first go at cutting costs and optimizing performance, though the risks of failure can be higher. 

Such deals also seem to go down better with some investors who have been particularly critical of the so-called "pass the parcel" deals that have been the mainstay of private equity activity for the last 18 months. 

"The pipelines in Europe are more active than in the United States. I think there are more carve-outs to come. There is not a huge trend here but there is certainly more than there has been in the last 12 months," one banker familiar with the processes said. 

Also on the block is Schneider Electric's (SCHN.PA) Custom Sensors and Technology (CST) unit and France Telecom's (FTE.PA) subsidiary Orange Switzerland.  Source

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Private Equity Funds Pay

Private Equity Funds Pay

Private Equity Face Regulations on Bonuses, Pay Disclosure

Hedge funds and private equity firms thought they had escaped curbs on pay from Britain's Financial Services Authority and other European regulators, but that doesn't seem to be true, according to PwC. Hedge funds and private equity firms are running into rules on how and when bonuses are paid and more pay disclosure. 

Many managers thought they would be able to avoid the pay regulation of financial institutions in Europe's Capital Requirements Directive but many of the new policies actually apply to asset management firms including private equity and hedge funds, an unwelcome surprise to many.

The AIFMD paper, published last week, targets asset managers, extending the reach of regulations made in Europe's Capital Requirements Directive, which referred only to "financial institutions" and which many managers thought they could avoid, Wright said.

"The rules will mean sweeping changes to the pay policies and practices of many asset management firms. Many thought they'd escaped the brunt of banking pay regulations, but they're coming back to bite," said Tim Wright, reward director at PwC.

Under earlier rules from the FSA, many asset managers fell into the most leniently treated group, while most private equity houses were exempt.

Most managers will now ultimately face much tougher rules, PwC said.

The new measures in the AIFMD -- a controversial piece of legislation that raised hackles when first proposed in the wake of the credit crisis -- require firms to pay at least half of bonuses in stock and defer between 40 and 60 percent of variable pay for around three to five years.  Source

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TA Associates DNCA Finance

Press Release: TA Associates Invests in DNCA Finance SA

The following press release on TA Associates covers the private equity firm's recent investment in DNCA Finance SA.    Click here to gain access to the contact details for TA Associates and more than 1,000 other private equity firms in our private equity firm directory.

BOSTON and LONDON, July 28, 2011 – TA Associates, a leading global growth private equity firm, today announced that certain of its private equity funds (collectively “TA Associates”) have completed an investment in DNCA Finance SA, a French asset management firm with €5.8 billion in funds under management. Terms of the investment have not been disclosed.

TA Associates purchased its stake in DNCA from majority shareholder Gruppo Banca Leonardo, the pan-European, Milan-based investment bank. Following the transaction, the shareholder base is now comprised of TA Associates, who will become the largest shareholder, the incumbent management team and Gruppo Banca Leonardo. The management team, which will continue to be led by executive chairman Joseph Chatel and CEO and CIO Jean-Charles Mériaux, will increase their shareholding as part of the transaction and will hold in excess of 40 percent of the equity. Gruppo Banca Leonardo will hold around 10 percent of the equity.

Headquartered in Paris and staffed by 45 employees, DNCA is one of the largest independent fund management boutiques in France. The company was founded in 2000 by Xavier Delaye, Charles Nouailhetas and Joseph Chatel, and now manages a diverse range of equity, bond, convertible and absolute return products investing both in France and internationally. DNCA’s fund stable includes the €1.8 billion Centifolia, one of France’s largest equity funds, managed by renowned fund manager Jean-Charles Mériaux. In March of this year, DNCA was awarded best French Asset Manager in its class at the Grand Prix Eurofonds-FundClass 2011 Awards.

“Having previously made investments in the likes of Jupiter Fund Management in London and First Eagle in the U.S. among many others, TA’s deep experience in the fund management sector was very important to us in selecting a new partner,” said Jean-Charles Mériaux, CEO and CIO of DNCA. “With its significant experience in this sector, TA will be able to assist DNCA with our continued expansion in France and elsewhere in Europe.”

“DNCA is one of only a handful of independent fund managers in the French market that has established a strong brand both amongst distribution partners and with investors,” said Christopher Parkin, Director, TA Associates Ltd., who will join DNCA Finance’s Board of Directors. “The company has a broad fund management team running a diverse range of funds which provide it with significant room to grow.” Ajit Nedungadi, a Managing Director in TA’s London office will also join the board.

“TA has built an impressive reputation in the asset management industry as a sophisticated long-term investor,” said Joseph Chatel, Executive Chairman, DNCA. “We very much look forward to working together to grow the business.”

“This transaction is consistent with our mission to be a leading, independent group, focused on its clients across continental Europe,” said Gerardo Braggiotti, CEO of Gruppo Banca Leonardo. “DNCA continues to be an important partner of our group and we are happy to have advised them to find the best strategic opportunity for their growth.”

TA Associates has more than four decades of investing experience, focusing on profitable growth companies.  The firm is one of the most experienced investors in investment management companies, having invested in 15 firms over the last 22 years. TA’s investments in the asset management industry include Affiliated Managers Group, AIM Management Group (Invesco Ltd.), Evanston Capital Management, First Eagle Investment Management, Jupiter Fund Management, K2 Advisors, Numeric Investors, Stadion Money Management and Thomson Advisory Group (PIMCO).

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Vintage Year Private Equity

What is the Vintage Year? | Private Equity | Definition

I was looking through some of the training videos we're uploading for the Certified Private Equity Professional program and I found a topic that I had not defined on here: vintage year.

The vintage year is the year in which the private equity or venture capital fund first makes its investment.  So, this is the time when the capital is first contributed from the private equity fund.  This should be distinguished from vintage returns which refers to the years of the highest returns within a private equity investment.

Here is more on Vintage Year Private Equity:

Investors can use the vintage year of an investment to further explain its returns. Having a vintage year occur at the peak or bottom of a business cycle can affect the later returns on the initial investment. During peaks in the market, new companies are more likely to be overvalued based on the current economic outlook. This increases the expectations on an investments' return because more money is initially contributed. Inversely, companies are typically undervalued during low points in the market; because less capital is initially contributed, these companies or projects have less pressure to generate big returns.  Source

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Eric Cantor Private Equity

Cantor: Ally to Hedge Funds and Private Equity in Debt Talks

It would be difficult to avoid writing in some way about the debt talks that are taking place in Washington. There is an interesting profile of Republican House Majority Leader Eric Cantor and his work fighting against attempts to raise taxes on hedge funds and private equity. Representative Cantor walked out of meetings with Vice President Biden, largely because Cantor refused to change the tax treatment of private equity and hedge fund managers. Since then, the debt ceiling negotiations have largely involved broader changes to the tax code and bigger cuts.

As the ratings agencies threaten to downgrade the United States' credit rating, Wall Street is bracing for the fallout if a deal is not reached, but at least for the moment it looks like hedge funds and private equity firms will be spared--largely thanks to Eric Cantor.

Among the White House’s top demands for new revenue are changes in the tax code affecting hedge funds, private equity firms and real estate partnerships, which would raise an estimated $20 billion over 10 years. 

For the past four years, Cantor has taken the lead in the House on fighting the same changes. He also has been one of the top recipients of contributions from those industries — last year, his two fundraising committees received nearly $2 million from securities and investment firms and real estate companies, more than double the figure for Boehner (R-Ohio). 

The hedge fund and private equity proposals were at the center of Cantor’s break with Biden’s team. Since then, the prospect for any immediate tax increases has declined, with the focus turning instead to a package based on spending cuts, with broader tax reform postponed.
Source

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Private Equity Investors Study

Private Equity Investors Still Looking for Fee Changes

Private equity managers are still fighting to justify the typical 2-and-20 fee structure (sometimes more, sometimes less) but limited partners remain largely opposed to fees they see as too high for too low of performance.  In a recent study, Preqin found that many private equity investors are still discontent over fund terms and conditions but they are willing to pay more for managers with a proven track-record of positive returns.   Other points of contention between the general partner and limited partner are: general partner contributions, the carry, hurdle rates and rebates.

Here is a summary of the findings for the study:

• 50% of LPs feel that there is a misalignment of interests between themselves and fund managers when it 
• comes to management fees. 
• 71% of investors are considering new GP relationships in 2011, and just 29% will only invest with existing fund managers.
• The mean management fee during the investment period for the largest funds has dropped to 1.71% in the past year. 
• 61% of investors stated that they would be willing to pay higher fees for access to fund managers that they perceive to have the best track records.
• The mean rebate of transaction and other fees by buyout fund managers to LPs is now 83%, the highest level ever.
• 69% of LPs would consider not investing in a fund if it did not conform to the ILPA Principles.
• A significant number of investors believe that GPs should invest more in their own funds in order to achieve a greater alignment of interests.  The Report

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The Next Dotcom Bubble

Do the IPOs of Zillow & LinkedIn Spell a Dotcom Bubble? 

What can we take away from the successful IPO of real estate website Zillow.com this week?  At least one observer is suggesting that this spells the beginnings of the next dotcom bubble.  I'm not so sure.  While there are certainly some bloated valuations of internet companies in the last couple years--especially of ones that had yet to prove that they could monetize their idea (think Twitter and Facebook--before all the ads).

“The mere fact that LinkedIn and HomeAway did so very well only helped [Zillow], and put even more euphoria into an IPO that didn’t need it,” said Scott Sweet, senior managing partner at IPO Boutique. “It already had the demand anyway.”

Zillow is the latest in a string of hot Internet companies — including LinkedIn — to create a market frenzy in its first day of trading. But for some of those stocks, that burst of enthusiasm vanished rapidly. Chinese social networking site Renren Inc., for instance, is now trading below its IPO price after soaring as much as 57% in its May debut. Similarly, shares of online radio service Pandora traded below its June IPO price for several days before rebounding.  Source

There are always going to be some shaky companies--especially web-based ones like Zillow or LinkedIn--that will open to high estimates and then settle to a more reasonable stock price (or fall off a cliff like in Renren Inc.'s case) but there is not the same type of sustained fervor and willful ignorance among investors to buy into any dotcom upstart like we saw at the end of the 1990's.  I think that this is partly because the companies are better run and more accountable and also because investors are more familiar with the website company model and know what to look for and what to look out for.
 
I'm not willing to say this absolutely is not the makings of the next dot com bubble (I'd have to be crazy to venture any definite prediction of where this is headed) but I have found that dotcom companies are more thoroughly vetted by investors, especially venture capitalists and private equity investors, than they once were and that the fundamentals of the companies are significantly more secure than they were for the majority of the companies during the last dotcom bubble. 

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Blackstone Group Stock

Blackstone Group Poised for a Private Equity Comeback?

Forbes has a good piece today on the resurgence of Blackstone Group (BX).  After taking a severe hit during the Great Recession, Blackstone Group looks poised to make a strong comeback and, hopefully, lead private equity to one as well.  How do you prove that your private equity firm is making a comeback?  How about by boosting quarterly earnings by 243%.  Nathan Vardi explains:

In the second-quarter, Blackstone Group earned $703 million on $1.3 billion of revenue. These profits are economic net income after taxes that exclude charges ties to Blackstone’s IPO. To get a sense of how things have changed, for the first half of 2011 these profits were $1.27 billion compared to $98.4 million in the first half of 2009.

While these are not go-go days for private equity like in 2007 when Blackstone chief Stephen Schwarzman threw a $3 million birthday party for himself, Tony James, Blackstone’s president, just purchased a Manhattan co-op for $24.9 million. Blackstone’s stock is up 18% this year and is hovering around $17 compared to its financial crisis low of $5, but Schwarzman & Co. have a long way to go till Blackstone’s stock reaches the levels of its 2007 initial public offering of $31. Investors were impressed by today’s earnings release and pushed the stock up 4% in early action.

While asset valuations of private equity industry portfolios have increased substantially, much of the rise has been not through exits but in unrealized gains. In addition, Blackstone and other big private equity firms have had a hard time putting a lot of their committed capital to work. Big deals have been hard to come by and large corporations armed with lots of cash have proven to be stiff competition. Blackstone funds recently had $31.4 billion of committed yet uninvested capital, a record amount of so-called dry powder. 

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Private Equity Firm List

Private Equity Firm Directory

Gain Access to a Directory of 1,000+ Private Equity Firms

Private equity firms are notoriously hard to contact.  If you have been trying in vain to get in touch with executives, partners and associates at private equity firms, I have a solution for you: the Private Equity Directory. 

Our team has invested our time in developing and updating a deep, constantly-improved directory of private equity firms and their contact details in Excel format.  This is a valuable resource for firms, capital raisers, individuals trying to meet with private equity firms, students, internship or job-seekers and private equity service providers. 

This Private Equity Firm Directory contains the private equity fund firm name, primary contact name, physical location, assets under management, phone number, fax, and email address as well.  Collectively the 1,000+ private equity firms in our database control well over $200B in assets.  This directory is a great way to gain access to hard-to-find contact details for private equity firms.  

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Private Equity New York Pension Funds

New York Pensions Look to Trim Private Equity Holdings

Bad news for private equity: New York City's pension funds are looking to dump as much as $2 billion in private equity holdings. At least one of five pension funds in New York is considering selling its stakes in Clayton, Dubilier & Rice LLC and Silver Lake Management LLC.  This is part of a larger trend of pensions selling off investments through the private equity secondary market. 

At least one of the five pension plans is weighing whether to sell stakes managed by Clayton, Dubilier & Rice LLC and Silver Lake Management LLC, said the people, who requested anonymity because investment decisions are confidential. Details about which holdings will be sold and what price would be acceptable are still being worked out, according to the people.

U.S. pension plans have been severing ties with asset managers through so-called secondary sales of private-equity stakes to free up money for new investments and improve returns. New York, which had 108 private-equity managers as of June 2010, is among investors seeking to concentrate bets with a smaller number of better-performing managers. Private equity accounted for about 6 percent of the $122.4 billion in assets for New York’s pension funds as of April 30.

“It was taboo for pensions to sell funds, but now they’re using a secondary sale as a portfolio-management tool,” said Brian Talbot, head of New York-based Neuberger Berman Group LLC’s secondaries team. “Pensions are invested in hundreds of funds, which has become a huge administrative burden that many of them have decided they can’t manage efficiently.”  Source

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CalPERS Private Equity Performance

CalPERS Posts 20% Gain Boosted by Private Equity Performance

Good news for private equity firms trying to make the case to institutional investors that they should increase their allocation to private equity: CalPERS just posted a 20.7% gain partly from investments in private equity.  This marks the best return for the country's largest pension fund, California California Public Employees’ Retirement System, in fourteen years.  Private equity alone returned 25% for the three months ending in March. 

Shares held by the $237.5 billion plan, known as Calpers, returned 30.2 percent in the year that ended June 30, fund administrators said today. Fixed-income investments rose 7 percent. Real estate and private equity, which are both delayed by three months, earned 10.2 percent and 25.3 percent through March, respectively.

The results may help Calpers parry concerns that it relies on overly optimistic assumptions for its return on assets that hide the true size of its deficits. The fund lost almost a quarter of its value in 2009 as the global recession dragged down stock prices and real estate values.

“Obviously the results are pleasing,” the Chief Investment Officer Joe Dear told the governing board today at a meeting in Petaluma, north of San Francisco. “We are in the 20 percent club. It was a good year. We are back.” Source

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Private Equity Deals July 15 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 15 2011 

It's Friday, so we'll have a quick wrap-up of the week today.  This week we saw that venture capital and private equity have so far invested $93 million in 2011.  Also, in venture capital news, VC funds raised 20% more in the first half of 2011 than the same period last year.  Finally, the other big story was more concrete data on fundraising for private equity: U.S. private equity funds raised $64.7 billion and European funds raised $24 billion during the first half. 

In today's news, Bank of America is taking steps to cut $250 million of private equity funds that are held on its balance sheet.  Also, Providence Equity Partners is giving its investors a break on fees.  Click here to gain access to the contact details for Providence Equity Partners and more than 1,000 other private equity firms in our private equity firm directory.

Providence Equity Partners Gives Investors a Break

Providence Equity Partners LLC is offering a fee break to large investors as it enters the second leg of fund raising for a $6 billion seventh fund, said people familiar with the situation.

The firm will charge a lower management fee for investors that commit $500 million or more to Providence Equity Partners VII LP, which recently held a first close on $1.9 billion at the end of June, these people said. It is unclear what the actual fee break will be though, these people added.

The fund has secured $3 billion in commitments--albeit not all were included in the first closing. Source

Bank of America is Cutting its Private Equity Funds

Bank of America Corp. put up for sale roughly $250 million of private equity funds held on its balance sheet, said people familiar with the situation.

The portfolio is made up of 50 private equity funds that are primarily focused on U.S. buyouts, these people said. The positions up for sale are mostly in funds that are at the end of their lives with an average vintage year of 2000, these people said.

In the past, the bank has invested in firms such as Hicks Muse Tate & Furst, Fortsmann Little & Co. and Terra Firma Capital Partners Ltd. Source

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Private Equity Deals July 14 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 14 2011 

Starting today's newsletter is an article about private equity firms buying nonbanking financial companies in India.  Next, private equity firms are increasingly turning to their investors to partner with in large deals, rather than a competing private equity firm in a club deal.  Finally, the Philadelphia 76ers will have a new owner: a group of private equity managers including executives at Blackstone Group and Apollo Global Management.   Click here to gain access to the contact details for Blackstone Group and Apollo Global Management and more than 1,000 other private equity firms in our private equity firm directory.


Private-Equity Firms Buying Nonbanking Financial Companies

Private-equity firms are chasing nonbanking financial companies even as India's banking regulator has signaled its determination to tighten its grip on the sector.

Since January, private-equity firms have invested $200 million in six nonbanking financial companies, and more such deals are in the offing, fund managers say.

Baring Private Equity Partners India Pvt. Ltd, which invested in Muthoot Finance Ltd. last July, is one such firm scouting for more nonbanking financial companies in which it can invest.   Source

 Private Equity Firms Find New Partners: Their Investors

When buyout barons needed cash for a splashy acquisition, they once teamed up with rivals. Today, some private-equity firms are turning to a different source of cash: their investors.

Wednesday, London-based buyout firm Apax Partners, along with affiliates of two big pension funds, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board of Canada, reached a $6.3 billion deal, including debt, to acquire wound-care and hospital-bed provider Kinetic Concepts Inc., one of the largest leveraged buyouts since the financial crisis.  Source

Private Equity Partners Buying Philadelphia 76ers

A couple of weeks ago I reported that a private equity manager was buying the Detroit Pistons in hopes of reviving the franchise and running it like a portfolio.  Now, a group of private equity managers has finalized an agreement to buy the Philadelphia 76ers.   

A group led by Joshua Harris, a co-founder of the private equity firm Apollo Global Management, announced late on Wednesday that it had reached an agreement to buy the Philadelphia 76ers basketball team from the sports company Comcast-Spectacor.

Terms of the agreement were not disclosed, but Mr. Harris and his partners will pay about $280 million for the 76ers, according to a person briefed on the deal who requested anonymity because he was not authorized to discuss it publicly. The deal is subject to approval by the National Basketball Association board of commissioners. 

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Private Equity Deals July 13 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 13 2011 

The big news this morning comes from across the pond: Rupert Murdoch's News Corp. has withdrawn a bid to buy British TV network BSkyB amid the growing scandal at News Corp.-owned newspapers.  Earlier this week, in a cunning political move, Murdoch withdrew some anti-monopoly concessions he made so that the deal would be referred to the Competition Commission in hopes of buying time for the scandal to blow over.  But with Murdoch's allies in the UK government condemning the deal, News Corp finally ended their bid in what is considered a hard blow to the media giant.

Leading off this Private Equity Deals newsletter is a story about the high investment in education from private equity firms and venture capitalists.  According to VC Intelligence, private equity and venture capital investment is almost to $100 million so far for 2011. Next, Steve Klinsky, the founder and chief executive of New Mountain Capital, offers an adjustment to the picture of private equity painted in a recent DealBook column.  Finally, TA Associates has wrapped up its deal to buy a majority stake in Stadion Money Management.  Click here to gain access to the contact details for TA Associates and more than 1,000 other private equity firms in our private equity firm directory.

Private Equity and Venture Capital Firms Invest $93 million in 2011

According to VC Intelligence, private equity and venture capital investment in education is almost to $100 million so far this year.  Private equity and venture capital firms have invested in 10 education companies in 2011.

Private equity and venture capital investors have pumped USD 93 million into 10 education companies so far in 2011 and are bullish about the sector's prospects going forward.     

According to Venture Intelligence, PE/VC investors have already invested USD 93 million in 10 education companies so far in 2011, led by a Rs 100 crore (about USD 22 million) investment in vocational training and placement firm Teamlease Services.    Source

Steve Klinsky Defends Private Equity

Steve Klinsky, founder and chief executive of New Mountain Capital, offers an adjustment to the picture of private equity painted in a recent DealBook column.   His defense, titled "Defending Private Equity From a Flawed Picture" is worth reading.

DealBook recently published a column by the Deal Professor saying that venture capital and private equity are two very different and clashing worlds and citing venture capital’s better public image. “Venture capital is viewed as a creative industry, while the world considers private equity as finance, money men who do not create,” Steven M. Davidoff wrote.

Venture capital, when properly and successfully executed, does in fact deserve full praise. But the same praise is deserved for successfully executed private equity investments that benefit society just as much and generally apply in even larger dollar amounts across a broader range of industries.  Source

TA Associates Obtains Majority Stake in Stadion

TA Associates, a private equity firm with offices in Boston, said it has completed an investment in Stadion Money Management LLC, an investment management firm.

Terms of the investment were not disclosed.

M. Roy Burns, a principal at TA Associates, and Roger B. Kafker, a managing director at TA Associates, have joined the company’s board of directors.  Source

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Private Equity Deals July 12 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 12 2011 

The news for this Tuesday is a little scattered: first, we take a look a US venture capital fundraising numbers and how the increase may not be as great as it seems.  Then, California's pension system is looking for a private equity fund of funds manager to invest in.  Finally, there is an interesting article today in DealBook that talks about the growing trend of private equity investment in for-profit education companies.

The Obama Administration recently outlined new regulations on the for-profit colleges but a new investment by Weld North suggests that private equity firms still see a lot of potential in this area.  Weld North is a new venture involving the former CEO of Kaplan Inc. and KKR; it is the first deal that the investment partnership has completed.  Click here to gain access to the contact details for KKR and more than 1,000 other private equity firms in our private equity firm directory.

US Venture Capital Fundraising Up 20% in First Half of 2011

Venture capital fundraising in the US increased 20% over the first half of 2011, a welcome sign for an industry that has been struggling to regain its balance after faltering during the recession.  Unfortunately, the number of VC funds that held closings fell by 38% to just 50 funds.

Dow Jones is reporting mixed numbers for venture fundraising this morning, releasing data that shows that capital raised for U.S. venture funds rose 20 percent over the same period a year ago, to $8.1 billion. But that stat comes with a caveat— the number of funds that held closings plummeted 38% to 50 funds. Seven firms were responsible for raising the bulk of the $8.1 billion, raising almost 80 percent of the total, or $6.3 billion. For basis of comparison, in the first half of 2010, 81 U.S. venture funds raised $6.8 billion.

In the first half of 2011, a number of well-known VC firms closed significant funds. Bessemer closed a $1.6 billion fund, Sequoia closed a $1.3 billion fund, and Greylock added a $1 billion fund. In June, Accel closed two funds for a total of $1.35 billion in new capital. Andreessen Horowitz added a $200 million growth fund in April.  Source

CalPERS Issues RFP for Private Equity Fund of Funds Manager

The California Public Employees’ Retirement System is looking for a private equity fund of funds manager, according to FinAlternatives.

The California Public Employees’ Retirement System is searching for a new investment vehicle—most likely a fund of funds—that invests in domestic emerging managers for the pension fund’s private equity program.
The manager would invest on behalf of CalPERS in a 7- to 10-year relationship across the private equity spectrum, including venture capital, expansion capital and leveraged buyout transactions.
“Through the manager, we’re looking for partnerships whose principal officers have individual experiences and underlying investment strategies to generate earnings in the top quartile of private equity investments,” said Réal Desrochers, senior investment officer for CalPERS Alternative Investment Management Program.

Another Private Equity Firm Looks to For-Profit Education

Private equity firms have taken a strong liking to for-profit education providers, as the latest deal involving Kohlberg Kravis Roberts & Company (KKR) shows.

Jonathan N. Grayer, the former chief executive of the education company Kaplan Inc., formed an investment partnership with the private equity firm Kohlberg Kravis Roberts & Company in early 2010. Now, after looking at 350 companies over the last year and a half, they have done their first deal.

Their venture, named Weld North, has acquired Education2020, an education software company based in Scottsdale, Ariz. The financial terms of the deal were not disclosed, but people briefed on the transaction said the purchase price was about $50 million.
Despite the deal’s small size, it underscores the keen interest of private equity firms in for-profit education.  Source

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Private Equity Deals July 11 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 11 2011 

Happy Monday, today started with a press conference from President Obama discussing the large debt deal that he and Congressional leaders are trying to hammer out ahead of the August 2 deadline.  In today's newsletter: more news on private equity fundraising in the US and Europe, talk of private equity investing in the Bank of Ireland, and Providence Equity Partners completes back-to-back deals.   Click here to gain access to the contact details for Providence Equity Partners and more than 1,000 other private equity firms in our private equity firm directory.

U.S. Private Equity Funds Raised $64.7 Billion, Euro Funds Raised $24 Billion During 1st Half

Limited partners gradually picked up their commitment pace to private equity during the first half of 2011. According to figures from Dow Jones LP Source, U.S. private equity funds raised $64.7 billion for 201 funds in the first half of the year, a 35% increase in capital committed over the $47.8 billion raised by 225 funds during the first half of 2010. Buyout and venture capital funds drove the rebound in the U.S. and helped put the industry on pace to exceed last year's fund-raising total.

European private equity funds collected $24 billion for 62 funds during the quarter, up 48% from the $16.2 billion raised for 76 funds a year earlier. While fund-raising figures are still well below levels seen before the economic downturn, the first half of 2011 was the strongest first half for fund-raising since 2008.  Source

Bank of Ireland in Talks with Private Equity Firms

Bank of Ireland is still in talks with private equity firms about possibly taking a stake in the lender, its chairman said on Monday.

"There have been extensive discussions with private equity interests. As of today these proposals, which have conditions attached to them, have not been brought to a successful conclusion but that is not to say that they are totally gone away," Pat Molloy told a meeting of shareholders. Source

Providence Equity Partners Completes Back-to-Back Local Deals

Providence Equity Partners is on a two-deal roll after it completed its deal to buy Blackboard at the start of this month.  The private equity firm purchased SRA International, the government contracting firm, three months ago. 

Two of the region’s biggest business deals of late have come at the hands, or more accurately the pocketbook, of the same private-equity firm.

Providence Equity Partners, a Rhode Island-based investment house, snapped up online education outfit Blackboard on July 1 for $1.64 billion. Exactly three months prior, it paid $1.9 billion for the government contracting company SRA International.  Source

Click here to gain access to the contact details for Providence Equity Partners and more than 1,000 other private equity firms in our private equity firm directory.  

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Private Equity Deals July 8 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 8 2011 

The last day of the work week and it appears it will be a bitter end as the latest jobs report has showed significantly less job growth in June than economists predicted.  Most analysts that I've heard talk on the report point to the high price of oil as the main cause of such low numbers. 

As for private equity, this newsletter focuses on an article entitled "The Case for Raising Taxes on Private Equity" by Dan Primack (formerly of peHUB and now writing for Forbes), the private equity and venture capital market in China, and Carlyle Group's rumored acqusition of another buyout shop.  Click here to gain access to the contact details for Carlyle Group and more than 1,000 other private equity firms in our private equity firm directory.

Dan Primack on Why Taxes Should be Raised on Carried Interest

I used to write a lot about the tax treatment of carried interest, or the "cut" of investment profits that private equity managers keep for themselves. I would argue that carried interest is a contingency fee for services rendered (investing other people's money), and should therefore be taxed as ordinary income (35%) rather than as capital gains (15%). You know, taxed like the rest of us.

But then I stopped. Not because my opinion changed, but because I lost faith that Congress would do the right thing.  Source

China Private Equity and Venture Capital Fueled by High Returns, IPOs

A booming IPO market and the lure of high returns kept China's private equity sector humming in the first half, stoking fear of asset bubbles amid rising concerns over the quality of listed Chinese companies.

Fifty private equity funds raised $14.54 billion in China in the first half, doubling the amount raised during the previous six months, while the country's venture capital market attracted a record $8.1 billion in fresh money inflows, exceeding last year's total, according to consultancy Zero2IPO Group. Source

 Carlyle Group to Acquire Energy Capital Partners?

The private equity giant Carlyle Group is in talks to acquire Energy Capital Partners, a buyout shop focused on investments in power plants and gas pipelines, according to two people briefed on the talks.
Carlyle’s potential acquisition of Energy Capital underscores the relentless drive by the firm to gather more assets and broaden its product line as it gears up for an initial public offering.
Carlyle, which is based in Washington, is expected to join its rivals the Blackstone Group, Kohlberg Kravis Roberts & Company and Apollo Global Management later this year as publicly traded private equity firms. Source

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4. Private Equity Directory - List of Private Equity Firms

Tags: investments, private equity deals, private equity investment, management, contact, website, LP, group, news

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Private Equity Deals July 7 2011

Private Equity Deals July 2011

Private Equity Deals & Rumors for July 7 2011 

We're almost through this short week and I, for one, am looking forward to another nice weekend.  In today's newsletter, there is mostly fundraising news and also an interesting article on private equity investment in India.  Enjoy!

Private Equity Real Estate Continues Slow Climb

Private equity real estate fundraising continues to climb, albeit at a gradual pace.  Private equity real estate funds took in an addition $2 billion over what they raised last quarter.

Private equity real estate fundraising is gradually rising as the second quarter of 2011 witnessed a $2 billion increase from the previous quarter, according to an analysis from alternative asset research firm Preqin.

Data showed that 18 funds took in a total of $11.2 billion in new capital from investors in the second quarter. The total is up from the $8.9 billion raised in the first quarter of 2011 and the $7.1 billion raised in the fourth quarter of 2010.

The most capital was raised by funds that have a North American focus. Those 10 funds received aggregate commitments of $8.6 billion.

Preqin pointed out that Dallas-based Lone Star Funds had one of the most notable closings in the second quarter. The firm closed on its Lone Star Real Estate Fund II with commitments of $5.5 billion, making it the fifth-largest private equity real estate fund of all time, according to Andrew Moylan, manager of real estate data for Preqin.  Source

Private Equity Fundraising Rebound

Forbes' blog has an article on the private equity fundraising rebound.

New private equity fund-raising was all but dormant in 2010 and was weaker even than in 2009, itself an inauspicious year. But if past patterns remain a reliable guide, the past two years likely marked a cyclical low, and fund-raising is poised for a recovery. 

As we described in our Global Private Equity Report, fund-raising typically lags investing activity on the way down and, again, as the industry enters a new up cycle. Fund-raising remains high as deal activity plunges because many commitments are signed months before the market tumbles. It does not pick up again until allocation pressures and liquidity constraints ease, and PE limited partners LPs regain their footing.Source

Private Equity Investment in India Up 45% April-June

Private equity investments in India grew at an impressive clip, rising by 45% from April through June.

NEW DELHI – Private equity firms' investments in India during the April-June period rose 45% from a year earlier to $2.92 billion, Venture Intelligence said Thursday.
Although sharply higher than the $1.99 billion in the year-earlier period, the number was 15% lower than the $3.36 billion recorded in January-March, the investment tracking company said.

There were 112 private-equity deals in the just-ended quarter, compared with 70 a year earlier and 91 in January-March.
Source

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Link to This Resource: Private Equity Deals July 7 2011

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Private Equity Deals July 6 2011

Private Equity Deals

Private Equity Deals & Rumors for July 6 2011 

The newsletter for today is a little bit brief because I've been fielding a lot of phone calls and e-mails.  It's a pretty positive news cycle for private equity today: a couple minor deals, Lexington Partners closed its $7 billion Lexington Capital Partners VII fund, and wealth managers are looking more and more to private equity.

Wealth Management Private Equity

Wealth management firms are increasingly turning to private equity funds to make up for past losses.  Hedge fund managers still lead in allocations, but it is a welcome sign for the private equity industry that is trying to boost its fundraising to where it once was.

Source

Confirmation: Private Equity Fundraising Rises in Second Quarter

It's always tough to rely on the early data but it seems that private equity fundraising really has risen in the second quarter, a nice boon to private equity managers and marketers working hard to boost AUM.

Private equity fundraising was on the rise in Q2 2011 as 120 p.e. funds worldwide reached a final close, raising a total of $66 billion.

According to a recent survey by Preqin, this number represents an increase over the $61.6 billion collected during the first quarter of 2011.

In addition to the closings, another 113 funds held interim closes during the quarter, raising $24.5 billion toward their final targets.  Source

A Private Equity Tutorial

For those of you new to the industry or just looking to brush up on general knowledge, the SF Chronicle is running a "Private Equity Primer" that may be of interest.  But if you're on this website, you're presumably already pretty well-versed in the industry.

1. Private Equity Tracker Tool
2. Private Equity Career Guide
3. Private Equity Training
4. Private Equity Directory - List of Private Equity Firms

Tags: private equity investments, private equity deals, private equity news, Capital partners, contact, website, LP, group, news

Link to This Resource: Private Equity Deals July 6 2011

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Private Equity Deals July 5 2011

Private Equity Deals

Private Equity Deals & Rumors for July 5 2011 

Hope everyone had a great Independence Day weekend, now it's back to work for a short week.  Today we have the latest fundraising data, with early estimates for the second quarter showing an uptick in fundraising by private equity firms.  Also, TPG is taking Immucor private and there is a good interview of Go Daddy's founder talking about his decision to sell in a $2.25 billion deal from private equity firms.

Private Equity Fundraising 2Q 2011

North American real estate-focused private equity funds inhaled a lot of capital from the estimated $11.2 billion that global private equity funds raised in the second quarter of 2011.

Private equity real estate funds focused on the North American property market hogged the lion's share of the $11.2 billion raised by those with a final close in the second quarter of 2011, research firm Preqin said.

Total commitments were up on the $8.9 billion raised in the first quarter, and on the $7.1 billion raised in fourth-quarter 2010, Preqin said on Monday.  Source

TPG Taking Immucor Private

TPG is taking diagnostics firm Immucor private for $1.97 billion.

Immucor has been seen as a potential target because of its unique technology that automates the identification of blood types -- a process that was earlier done manually.
The deal follows a flurry of private equity-backed acquisitions, which have risen about 42 percent this year from a year ago.

"Immucor has done a great job of automating the blood typing process and bringing in latest technologies to what used to be a manual process," Avondale Partners analyst Daniel Owczarski said.

"There is some competition but nothing that has been able to slow them down," he added. Source

Go Daddy Bought for $2.25 Billion, Interview with Founder Bob Parsons

There's an interesting story focusing on Go Daddy, the domain registrar company, and its decision to agree to a buyout from private equity firms KKR, Silver Lake and Technology Crossover Ventures.

When KKR, Silver Lake and eventually Technology Crossover Ventures invested in his Scottsdale-based domain name registration company, Parsons said it opened the doors to a much larger Go Daddy than existed before.

“They’re savvy investors,” Parsons told the Phoenix Business Journal late Friday. “They’re smart investors. They only invest in market leaders and growing companies, and Go Daddy is both of them."  Source

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3. Private Equity Training
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Tags: private equity Go Daddy, Private Equity deals, private equity deals 2011, private equity fundraising, private equity funds

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