Blackstone is reportedly weighing the prospect of outbidding the offer to take Dell private made by Dell’s founder and Silver Lake Management. After the initial bid for $24.4 billion from Michael Dell and a private equity firm, the board now has til the end of the week to solicit higher bids and it appears Blackstone is at least considering throwing their hat in the ring and exercising their considerable financial muscles. If Blackstone does make an offer, it’s likely that Mr. Dell and his partners could make a counter at a higher price–one that might satisfy Dell shareholders (especially activist investor Carl Icahn). It’s worth monitoring the situation to see whether Blackstone or any other big player makes a serious bid for the computer maker.

If you are looking to learn about a growing and important investor group, you should consider our upcoming family office workshops in New York and LA. We have received a tremendous amount of positive feedback from fund managers and investment professionals who attended our previous investment workshops. You can find registration information here: http://familyoffices.com/events

tags: Blackstone Dell Buyout, Blackstone Dell, Blackstone buyout, Blackstone buyout of Dell, Dell private equity, Dell bidding war, private equity bidding war Dell, Dell board, Dell share price offer, Dell merger and acquisition, Dell private equity investor, Michael Dell

The following is a great infographic supplied to me via Firmex that covers the top due diligence problems that occur in mergers and acquisitions.  As you can see, when the deals are this big, the cost of a due diligence oversight can be unbelievably high.

Private equity investors face a new hurdle, unsurprisingly it’s in the form of new regulation as the U.S. government seeks to prevent Americans from hiding assets overseas.  As Pensions and Investments explains, the new regulations will likely not be a direct problem for institutional investors but the real cost will come from increased compliance headaches in ensuring that asset managers adhere to the requirements of the The Foreign Account Tax Compliance Act.

While institutional investors are not directly affected by the new law, they will need to ensure the asset managers with which they do business are fully compliant, so that investment returns aren’t diminished by tax penalties.

The Foreign Account Tax Compliance Act, which requires financial institutions to identify Americans who have investments in non-U.S. financial accounts or entities, “is increasing exponentially the level of operational difficulty for asset managers. It is probably the most pressing regulatory challenge facing the U.S. now,” said David Richardson, managing tax director for KPMG Financial Services in New York.

“It’s going to be a very heavy lift,” agreed Harris Horowitz, managing director and global head of tax for BlackRock (BLK) Inc. (BLK), New York.

The final FATCA regulations, issued Jan. 17 by the Internal Revenue Service, are sweeping and, when fully implemented, the law will apply to any fund trading or investing, directly or indirectly, in U.S. assets, or any entity in an affiliated group with that fund. It also applies to the funds’ service providers and counterparties.

Except for a few asset managers with purely U.S. funds and no offshore vehicles, most private equity and hedge funds will have to register with the IRS as a foreign financial institution.

 

tags: private equity, private equity investors, laws, compliance, private equity compliance costs, private equity foreign account tax compliance act, Private Equity Foreign Account Tax Compliance Act law, Private Equity Foreign Account Tax Compliance Act law, investors

Join us on May 10th in Los Angeles or June 7th, 2013 in New York for a full day family office training workshop covering family office industry fundamentals, best practices, investment insights, and fund manager selection preferences.  Family offices have emerged in recent years as one of the most important investor group for private equity funds as more ultra high net worth families look to add private equity investments to their portfolio.  This event will be a great opportunity for private equity professionals to get an inside look at the family office industry from experts and family office executives.  So reserve your spot today to guarantee your inside access to the family office industry.

Workshop Trainers Include: 

- John Jonson, Capricorn Investment Group, LLC ($5B Multi-Family Office) [LA Workshop]
- Paul Tramontano, Constelaltion Wealth Advisors (Top 30 Multi-Family Office) [NYC Workshop]
- Jonathan Bergman, TAG Associates, LLC (Top 30 Multi-Family Office) [NYC Workshop]
- Richard C. Wilson, Family Offices Group (#1 Family Office Association) [LA & NYC Workshops]
- Michael Connor, Consolidated Investment Group ($1B+ Single Family Office) [NYC Workshop]
- John Bishop, Bishop Office, LLC (Single Family Office) [LA & NYC Workshops]
- Lee Hauser, PhD., First Foundation (Multi-Family Office) [LA Workshop]

Download the Workshop Brochure PDFs for May 10th in Los Angeles (Gateway Sheraton LAX Hotel) or  June 7th in New York (Harvard Club of NYC)

Benefits of Attending One or Both of These Family Office Training Workshops:

1) Get trained directly from $1B+ single family offices and top 50 multi-family office executives on how to operate, grow, and invest capital as a family office.  Learn about and take advantage of the rapidly growing family office industry.

2) Connect face-to-face with peers, ultra-wealthy families, and family offices that you can share resources or partner with in the future. (From our last family office workshop, negotiations are under way for three joint venture deals worth 7 and 8 figure potential.)

3) Come away with the top 20 fund management selection criteria that most family offices apply to their fund manager research process.  Plus, listen to a presentation on quick character analysis tools you can use to evaluate potential business partners, investors, or fund manager executives.

Where: The Los Angeles workshop is being held at the Gateway Sheraton LAX, just a shuttle ride away from the LAX International Airport at 6101 Century Blvd. Los Angeles, CA 90045 (310) 642-1111.

The New York workshop is being held in The Harvard Club of New York, right in midtown at 35 West 44th Street New York, NY 10036 Phone: 212.840.6600

When: 9AM to 5PM on Friday May 10th, 2013 in Los Angeles (Sheraton) or Friday June 7th in New York (Harvard Club) Includes: Fully Catered Breakfast, Lunch, and Networking Session

Free Training for Family Offices: Family offices who contact us and get cleared as a family office may attend for free.

Training Agenda: To review the training agenda for each of these two family office workshops please see page 2 of our brochures for Los Angeles and New York.

Exclusive Resources FREE With Admission:

	30 Hours of Audio Interviews With Family Office Executives: Each participant is given free, lifetime access to the Qualified Family Office Professional (QFOP) training platform, which includes more than 300 video modules and over 30 hours of audio interviews with top family office executives from around the world. (Alone, this resource is worth $995.)
	Free Family Office Book: Each participant will be given a free copy of “The Family Office Book: Investing Capital for the Ultra-Affluent” to reference during the event and take home at the end of the day.  This book includes over 30 free video modules on the family office industry for you to watch at your own pace over the internet.

Participants Include:

1) Single and multi-family office professionals, wealth management/RIA executives, and ultra-wealthy families and HNW individuals who are considering setting up their own family office, virtual family office, or possibly hiring a multi-family office

2) Fund managers, institutional investment consultants, and fund of funds who want to better understand how to more effectively work with family offices

3) CPAs, attorneys, consultants, and placement agents who are looking to better understand the family office landscape

Sponsors:

“Attending the Richard Wilson family office seminar was an extremely valuable experience that took the informational content of his book (“The Family Office Book: Investing Capital for the Ultra-Affluent”) to an entirely new level.  Richard’s vast experience and exposure to family offices worldwide can best be appreciated in the personal interaction of a seminar.  Information is exchanged in a manner that protects the confidentiality and privacy of all family offices involved”.

Risk Free Offer: If you attend this conference and find that you don’t get at least $3,000 of value, the Family Offices Group will give you 100% of your money back on admissions paid. You will also be allowed to keep the copy of the family office book and handouts for your trouble.

The Family Offices Group is the only conference and training company that makes this offer because we have worked hard to provide you value during the workshop.  We also have included over 75 hours of complimentary audio and video training resources for your benefit to use after the workshop is complete.

I look forward to meeting and networking with you at this live workshop, thank you for your time.

Richard Wilson (212) 729-5067 CEO & Founder Family Offices Group

Workshop Participants: Our last family office training workshop at the Harvard club in November of 2012 sold out in just 30 days. We had more than 90 professionals from various backgrounds, including: ultra-wealth families; more than two dozen multi-family offices, RIAs, and wealth management firms; a dozen single family offices; and many attorneys, consultants, and institutional fund managers.

What Are Others Saying About Our Training Workshops?  The following are quotes written by some of the 300+ past full day workshop attendees:

 ”Richard’s workshop was educational, current, and inspiring. We benefited from Richard’s breadth of knowledge as his presentation delved into the granular level, while only providing valuable, relevant information. His stories and anecdotes were woven seamlessly into the presentation.”

- Justin Browe | Partner, Sage Lane Capital

“The workshop content was relevant and educational, after the workshop my mind was racing with new ideas and ways to improve all aspects of my strategy and implementation of my strategy. Like any great coach or motivator I left the workshop more inspired and with a deeper desire to succeed.”

- Jay Robbins, GBS Life Plans

“From a marketing and networking perspective, my time spent today and the cost of the seminar was the best use of my time and money in a very long time.”

- Mike Roberts, AJG

Private Equity World Middle East

Mar. 4-5 | Jumeirah Beach Hotel, Dubai, UAE

International private equity funds will head to Dubai during the first week of March, to attend the 8^th annual Private Equity World Middle East conference.

For 2 days, the conference plays host to more than $3 trillion worth of investors, including the region’s biggest family offices, SWFs and private investors.

Dr Nouriel Roubini kicks things off on March 4th, sharing his forecasts with local investors seeking expert views on new opportunities and trends.  Speakers providing a more local perspective include billionaire family business man, Mishal Kanoo, and Chairman of the Social Security Investment Fund of Jordan, Henry Azzam.

A morning of onstage interviews with the region’s biggest GPs will provide insight into the best private equity opportunities in the region, with interviewees  including Abraaj Capital, Swicorp and Amwal Al Khaleej.

With a 1:1 fund to end-investor ratio and facilitated investor introductions and meetings, Private Equity World is an opportunity for international funds to meet face-to-face with local LPs and raise capital in the Middle East.

“The pre-eminent regional private equity event, with a strong focus on regional dynamics and a real practitioners’ perspective on regional private equity”
Yahya Jalil ǀ Director of Private Equity ǀ The National Investor

Download brochure for more details

Conference at a glance:

When: 4-5 March 2013

Where: Jumeirah Beach Hotel, Dubai, UAE

How to Register: Visit the conference website, www.terrapinn.com/peme/peb

Earlier this week, we looked at the potential Dell buyout.  Now, that deal has become a lot more feasible with surprise backing from a cash-rich corporation: Microsoft.  The software giant is reportedly considering a contribution of “several billion dollars” to the private equity-led bid to take Dell private and hopefully turnaround the struggling computer manufacturer.   Microsoft, of course, has business reasons for contributing to the venture: analysts explain that Microsoft needs Dell to survive as a viable and competitive company if Microsoft is going to compete in the computer and tablets, an area of ever-growing importance to Microsoft as it attempts to compete in touch screen technologies.

Microsoft has a history with the private equity firm reportedly leading the buyout bid, Silver Lake.  Silver Lake was the private equity firm that sold Microsoft the video-chatting company, Skype, for $8.5 billion almost 2 years ago.  This potential buyout would likely rival some of the largest buyouts in history and probably be the biggest since the financial crisis and the backing of a powerful corporation like Microsoft makes this deal more likely to occur.

If completed, a buyout of Dell would be the largest leveraged buyout since the financial crisis, reaching levels unseen since the takeovers of Hilton Hotels and the Texas energy giant TXU. Such a deal is taking advantage of Dell’s still-low stock price and the abundance of investors willing to buy up the debt issued as part of a transaction to take the company private. And Silver Lake has been working with Dell’s founder, Michael S. Dell, who is expected to contribute his nearly 16 percent stake in the company to a takeover bid.

Yet while many aspects of the potential deal have fallen into place, including a potential price of up to around $14 a share, talks between Dell and its potential buyers may still fall apart.  DealBook

Shares of Dell closed up 2.2 percent on Tuesday, at $13.12. They began rising after CNBC reported Microsoft’s potential involvement in a leveraged buyout. Microsoft shares slipped 0.4 percent, to $27.15.

 

tags: Microsoft Dell Private Equity Buyout, Microsoft Dell Private Equity, Microsoft Dell Private Equity purchase, Microsoft acquisition, Microsoft deal, Microsoft Silver Lake Deal, Microsoft Dell Deal, Microsoft Private Equity Buyout, Microsoft Buyout

The latest rumor flying around Wall Street and the private equity world is of the possible buyout of Dell Inc. (NASDAQ:DEL).  Obviously, this would be a very large buyout given the size of the target company; Dell’s revenue stood at more than $63 billion last year and the Texas-based firm employs over 100,000 employees.  The two firms reportedly in talks to take Dell private are TPG Capital and Silver Lake.

The leveraged buyout would be worth an estimated $20 billion (a rough number based on a rumored deal, so take with a big grain of salt) and one obstacle appears to be the amount of cash that the buyers would have to come up with, around $6 billion and no easy task.

But a takeover would be a daunting task for would-be buyers. A leveraged buyout could be worth more than $20 billion, with the company already bearing $9 billion in debt. At that level, it would be the biggest technology buyout since the $17.6 billion acquisition of Freescale Semiconductor by a consortium led by the Blackstone Group in 2006.  Dealbook

It’s still early and the numbers will obviously fluctuate if any deal even materializes, but the initial estimate north of $20 billion would place this deal among the largest in history.  Current market capitalization is $22 billion (some of that market cap is a result of buyout rumors that sent the stock price up) and with a premium typically paid to current investors in a buyout of this nature, the price could be even higher.

We’ll have to wait and see whether a deal gets executed but it’s safe to say a leveraged buyout of Dell Inc. would be a major news in the private equity industry and will be a closely watched deal over the years.  It’s been a little more than 5 years since a deal of this size got done and although there have been whispers of various possible buyouts, there haven’t been any deals exceeding $20 billion like the mega deals that were executed before the financial crisis since Blackstone’s 2007 buyout of Hilton Hotels.

According to Dealogic there hasn’t been a $20 billion buyout, excluding debt, since the Blackstone-led deal to acquire Hilton Hotels for $20.2 billion, a deal that closed in October 2007, near the height of the buyout boom.

In total there have been seven buyouts in history that eclipsed $20 billion excluding the target’s debt, according to Dealogic, six of which came across between 2006 and 2007. (The first $20 billion-plus buyout was the famed KKR buyout of RJR Nabisco in 1988, the central story of best-selling book “Barbarians at the Gate.”)  Source

 

tags: private equity, buyouts, private equity buyouts history, biggest private equity buyouts, biggest leveraged buyouts, biggest buyouts in history, private equity Dell, Dell private equity buyout, Dell Buyout, Dell Buyout Price, Dell Take Private, Dell private equity deal, Dell private equity price, Dell private equity leveraged buyout

If you’ve attended any private equity conferences or spoken with professionals at the larger buyout firms in the last few years, you likely ran into a common theme in the industry of late: China.  Buyout firms have long been attracted to China and seen it as the next promising frontier that could offer incredible returns on deals if they can be executed without government interference and other local obstacles to investing.  However, now with many buyout firms paying sky-high valuations, fears of an economic slowdown, obstacles to exiting investments and other concerns growing in the buyout community, some private equity firms are starting to cool on the region, at least in the short term.

Christopher Hunter, managing director and head of Beijing at industry adviser Cambridge Associates, said he remained bullish about opportunities in the region over the long term but that for many firms there would “be some tears over the next few years”.

He added: “Valuations are really high with many lesser skilled firms happy to do the deals at those levels to get their foot in the market whereas most of the skilled managers are waiting until valuations come down. That won’t happen until there are some disappointments but I think that the disappointments are inevitable given the prices that some managers are paying – 20-times [editda] and greater – and difficult exit markets.”

Chris Rynning, chief executive of China-focused private equity investor Origo Partners, said negative stories on Chinese companies’ corporate compliance, governance and reporting had hit the China private equity industry hard.

He added: “The exit environment needs to improve for Chinese private equity to return. There are long queues to IPO in China, and foreign listed Chinese companies are looking to delist and come back to the region. That cannot be good.”

Last week a report by Shenzhen-based private equity advisory China First Capital found that investors have yet to cash out of 7,500 of the 9,000 deals in China as owners struggle to exit investments. Buyout activity in China remained relatively static last year, compared with 2011, although the average deal size rose considerably, according to data from Dealogic. There were 61 deals worth a total of $10.1bn in 2012, compared with 67 deals worth $5.1bn in 2011.  Source

 

Tags: private equity, private equity deals, private equity in China, China private equity firms, private equity funds in China, Chinese private equity, private equity investments in China

I was forwarded a great article from AxialMarket that includes insights from M&A and private equity professionals on the economy, challenges and opportunities ahead, executing successful deals and other interesting topics.  I’ve included a few of these comments below but you can read the entire article here.

Concerns about Dry Powder:

“In the middle market it’s going to be increasingly difficult [to invest] because of the overhang of capital compared to the number of companies on the market. It’s going to drive up purchase prices and drive down returns. All of the good companies are being held and grown for better times, so there is a lot of capital chasing a relative few good deals.” – Tim MacColl in Make Your Own Luck (February 2012)

Building Relationships with Family Offices Can Be Challenging, but Rewarding: Richard is the author of the recent book on family office investing titled, The Family Office Book: Investing Capital for the Ultra-Affluent.
“We talk with family offices every day and meet with them face-to-face every week, and it still takes a long time to generate solid relationships, raise capital, or organize club deals.” He added, “Many of these family offices are connected with ultra-wealthy family offices and leaders in a variety of businesses.” – Richard C. Wilson in Richard C. Wilson on Connecting with Family Offices (November 2012)

Capital Gains Tax Caused Increased Deal Activity in Q4: This is a topic we covered last month in our Family Office Monthly newsletter.

“The spike [in deal flow] is already happening and [capital gains] is a factor for businesses that are on the market right now. Clients that we are working with today are seeking a close date no later than December 31.” – Darren De Vries in Deal Flow on the Rise: Is Capital Gains Tax the Culprit?(November 2012)

Family Offices Are More Comfortable Acquiring in an Uncertain Economy:
“[Family offices] continue to be comfortable acquiring businesses in this environment, especially because we don’t use any financial leverage. I’m not sure that we’d feel quite as comfortable if we had to do a leveraged acquisition when there’s meaningful risk of a recessionary economic environment.” – Gene Lee in Asset Class Diversification: A Family Office Perspective on Direct Investing (January 2012)

Read the whole article from AxialMarket here.

tags: axialmarket, private equity, private equity insights, private equity commentary, private equity outlook, buyout outlook, buyouts 2013, private equity 2013, private equity future, M&A

My colleague, Richard Wilson, recently did a great interview on how you can build relationships and connect with family offices.  Family offices are a fast-growing group of investors that often invest in private equity, so it is important to understand how these investors operate and what their preferences are.  Richard has spent years working with family offices and shares some great tips on what to do and what not to do when connecting with family offices.  Click here to read the interview he did with Axial Market.  Here is just a short summary of some of the ideas he shares:

Outreach: One of my strategies that I explained is just to put yourself out there through a proactive and diversified outreach to family offices.

Start Locally:  I am always pleasantly surprised at the number of family offices that operate locally in the Pacific Northwest.  I think that is a great place to start and people often assume that family offices only exist in major cities like New York or Los Angeles but there are often successful entrepreneurs who have a single family office or a branch of a major multi-family office in cities like Dallas, Denver or Phoenix.  So my advice is to start locally and work your way out from there.

Add Value: No one wants their time wasted so if you request a meeting with a family office and do not bring something of value to that meeting then you will have an unproductive meeting and likely will not get another one with that family office.  I have spent years working with family offices to ensure that I always bring something of value to them whether it is a compensation survey, my recent book on family office investing or sharing strategies for attracting high net worth individuals.  My goal is always to leave the other person in the meeting feeling like it was a good use of their time and that they got something of real value from our meeting.

To read all of the tips and strategies that Richard discusses, you can read the article here.

If you would like to start reaching out to family offices, please consider the Family Office Database that includes contact details on over 1,000 family offices.

tags: family office networking, family office firms, family office contacts, contacting family offices, working with family offices, how to network with family offices, networking with family offices, family office strategy