Top Story
Private Equity:
Shaken, not Broken By: Douglas Warner and Michael Weisser
February 2010  This past year the private equity industry was shaken but not broken. The year began badly with the full gloom of the credit crunch with new loans virtually unavailable for acquisition financing. During the year private equity sponsors navigated, among other obstacles, difficult fundraising markets, liquidity constrained limited partners and portfolio company loan amendments, restructurings and bankruptcies. The mood brightened somewhat in the second half of the year as the primary loan market began to reopen and the rebounding equity markets facilitated portfolio company IPOs.
Certain pundits predicted that the private equity model was "broken" and that the credit crunch would irrevocably change the relationship between sponsors and their LPs and that many sponsors would be driven from the business. However, despite the credit crunch and the resultant turbulence for the private equity industry, the private equity industry survived 2009 and appears poised to continue to thrive for the foreseeable future...Read more.
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Other Stories
White House Targets Captive Private Equity Firms
January 22, 2010 - Yesterday morning at the White House, President Barack Obama presented his ideas on future financial reform which may include changes that will prevent banks from operating private equity subsidiaries. In outlining his proposed changes, the President spoke of the improved strength of the financial system as compared to a year ago but he highlighted the fact that it is still operating under the same regulations that nearly led to its collapse. “These are rules that allowed firms to act contrary to the interests of customers; to conceal their exposure to debt through complex financial dealings; to benefit from taxpayer-insured deposits while making speculative investments; and to take on risks so vast that they posed threats to the entire system,” said President Obama...Read more.
2009 Carried Interest and Compensation Survey
The Private Equity Professional Digest 2009 Carried Interest and Compensation Survey was conducted from March through April 2009 and gathered data from 140 private equity funds. Approximately 70% of the funds in the survey are presently investing a fund that is less than $500 million in capital with the balance of the funds evenly split between $500 to $1 billion and greater than $1 billion. The survey results speak for themselves but one clear trend has emerged...Read more. (This article is premium content and is available to registered members only).
Non Partners Increase Share of Carried Interest
Every incoming class of private equity professionals want to know what their carry is going to be. Doling out carried interest stakes to new employees is commonplace now and it has been for quite some time. According to the most recent carried interest survey conducted by Private Equity Professional Digest, carry has become so widespread that most private equity firms give entry-level professionals a small percentage of carried interest and some even allow administrative staff to participate in the carry...Read more.
The Recessionary Fraud Double Whammy
The prospect of being on the wrong end of a fraud is an unnerving one for businesses at any time. In turbulent times like these though, the impact that a fraud may have can be far more marked than under happier economic conditions. Unfortunately, the probability of a new fraud being perpetrated — or of a longer running fraud finally coming to light — is far higher in a recessionary climate. To make matters worse, the well-intentioned cost cutting programs which many corporates are putting into place might reduce the efficiency of anti-fraud measures — just when they’re needed the most. Read more. (This article is premium content and is available to registered members only).
The Good the Bad and the Ugly: Options for Private Equity in the Current Business Downturn
Private Equity owned businesses are tripping loan covenants, being asked to inject fresh equity, and filing for bankruptcy protection in record numbers. The carnage is likely to increase as the steep falloff in business accelerates in 2009. Even now lenders are staffing up their workout groups to prepare for the onslaught, and being more aggressive with troubled businesses. In today’s adverse business environment, is there anything that can be done to prevent getting to this stage? Despite not having a magic wand to fix the economy (growth makes up for a lot of evils) and get credit flowing again, there is something proactive private equity firms can do to improve the survival odds of their portfolio companies. Address the classic leadership dilemma in a new way. Read more. (This article is premium content and is available to registered members only).
Introduction to the 2008 Marketing Best Practices - Investment Banks Survey
Editors Note: At some point or another every private equity professional has said, “I wish I knew what the banker thinking?” Well, wish no further. Private Equity Professional Digest surveyed more than 400 investment bankers to find out what’s on their minds when it comes to private equity firms, deal making and best practices. Read more. (This article is premium content and is available to registered members only)
Results of the 2008 Marketing Best Practices - Investment Banks Survey
Here are the responses to all 42 questions that the survey asked. Results are provided in a graphical format or in a PDF format as needed. Read more. (This article is premium content and is available to registered members only)
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About Us
Private Equity Professional Digest is published by and for private equity investors. Our staff of experienced private equity investors has many years of direct experience in private equity.
 We know what we are writing about because we have lived what we are writing about.
This website is dedicated to advancing the success of its members by providing timely and well written editorial on the tools, techniques and best practices used in the private equity industry. We provide full length feature articles, real world private equity based case studies, daily updates on the relevant news articles of the day and a free electronic newsletter which outlines the most relevant private equity news articles from the day before. |
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News to Know
February 8, 2010 - SFW Capital Partners has acquired AGDATA, an agricultural and animal health data services company. Terms of the transaction were not disclosed... Read more.
February 8, 2010 - Global bakery product supplier CSM has reached an agreement to acquire US bakery manufacturer Best Brands, a portfolio company of Brantley Partners, for a cash consideration of $510 million... Read more.
February 8, 2010 - Charter Oak Equity announced on Friday that is has made a growth equity investment in CoMc LLC, a porcelain tile manufacturer. Terms of the transaction were not disclosed... Read more.
February 8, 2010 - It was announced on Friday that Bridgepoint has acquired a majority equity interest in LGC Group Holdings, a forensic services company, in a transaction valuing LGC at £257 million... Read more.
For all deals from the past week please visit our trailing 4-day Deal Trax Archive 
February 5, 2010 - A new survey from Preqin reveals that institutional investors have more capital available for new private equity investments in the coming year and small to mid-market buyout funds look to be especially popular. Last year saw the lowest private equity fundraising total since 2004 and that was evidence of the continuing caution displayed by investors when making new private equity investments. In the wake of this sentiment, Preqin undertook a survey of over 100 institutional investors from around the world in order to assess their plans for further private equity investments in the year ahead. A link to a free download of the Preqin Private Equity Investor Survey - February 2010 is available at the end of this article... Read more.
February 5, 2010 - Activity in the IPO pipeline reached a two-year record in the fourth quarter of 2009, meeting pre-recession levels with 53 companies entering into registration, 30 IPOs launched and the overall pipeline increasing to 54 registrants seeking to raise $10.3 billion, according to the Ernst & Young IPO Pipeline study... Read more.
February 4, 2010 - Private-equity firms will survive only if they create business value through their companies' operational performance, as investors demonstrate that they will not invest in firms focused on value creation through financial leverage. This is one of the conclusions of a recently published white paper developed jointly by IESE Business School and The Boston Consulting Group (BCG). A link to a copy of the study is available at the end of this article... Read more.
February 4, 2010 - The Canadian Pension Plan Investment Board (“CPPIB”) and Northleaf Capital Partners announced today that CPPIB has committed an additional $400 million to the Canadian private equity and venture capital market. The funds will be committed to a Canadian fund-of-funds program that will be managed by CPPIB's investment partner Northleaf Capital Partners (formerly TD Capital Private Equity Investors)... Read more.
February 3, 2010 - Lovell Minnick Partners has held a final closing of Lovell Minnick Equity Partners III LP. The fund surpassed its $350 million target by successfully raising $455 million from institutional and private investors... Read more.
February 3, 2010 - Berkery Noyes has published its Education Industry M&A Trends Report 2009, which compiles statistical information on mergers and acquisitions across the PreK-12, Postsecondary, and Corporate and Professional sectors. A link to a free copy of the report is available at the end of this article... Read more.
For all articles from the past week
please visit our trailing
4-day News to Know Article Archive |
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