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 Ernst & Young Forms New Capital Advisory Group
August 17, 2010 - Ernst & Young has launched Ernst & Young Capital Advisors (“EYCA “) to provide a range of transaction and capital advisory services, including capital structure advisory, capital raising, restructuring, and special situations finance to middle market and larger corporate clients as well as creditors and other investors. The group will be located in Charlotte, NC...Read more.
 David Rubenstein Interviewed on Charlie Rose: “There’s no doubt that our image is not perfect”
August 3, 2010 - Last Friday, Carlyle Group co-founder David Rubenstein was interviewed by Charlie Rose on, of course, the “Charlie Rose” show on PBS. Mr. Rubenstein discusses the likelihood of a double dip recession in the US, his view on recent legislation passed by Congress that impacts private equity and the image problem that private equity has. The interview runs about 35 minutes. It is well worth your time. A link to the video appears at the end of this article...Read more.
 Private Equity Dominating 2010 Education Industry Transactions
July 27, 2010 - Berkery Noyes has released its 2010 Half Year Education M&A Trends Report. This report analyzes merger and acquisition activity in the Education Industry in the first half of 2010 and compares it with activity in the four previous sixth month periods from 2008-2009. Revenue multiples in the Education Industry continued their strong upward trend, rising 38% to 1.8, which represents a 200% growth from the low of 0.6 in 1st Half 2009...Read more.
 Midwest Mezzanine Notches 47% IRR on Two Exits in Q2
July 19, 2010 - During the second quarter of 2010 Midwest Mezzanine sold its interests in two portfolio companies, DeZURIK Water Controls and Ross Education. Each investment consisted primarily of subordinated debt combined with either warrants or an equity co-investment, and was held for just over five years. On a combined basis, these two investments generated realized returns of 4.1x invested capital and a 47% internal rate of return...Read more.
 Private Equity Fundraising at Lowest Level Since 2003
July 1, 2010 - In the second quarter of 2010 private equity fundraising from 82 closed funds totaled only $41 billion, the lowest total since 2003, and a reflection of the continuing harsh fundraising conditions for managers seeking capital. It is clear that the recovery in the fundraising market anticipated by many in the industry has yet to occur. However, a number of factors indicate that conditions are set to improve towards the end of this year and into 2011...Read more (This article is premium content and is available to registered members only).
 SEC Adopts New Measures to Curtail Pay to Play Practices by Investment Advisers
July 1, 2010 - The Securities and Exchange Commission voted unanimously yesterday to approve new rules to significantly curtail the corrupting influence of "pay to play" practices by investment advisers. Pay to play is the practice of making campaign contributions and related payments to elected officials in order to influence the awarding of contracts for the management of public pension plan assets and similar government investment accounts...Read more (This article is premium content and is available to registered members only).
 New York Private Equity Firms May See Carry Taxed as Ordinary Income
June 30, 2010 - It was reported this morning that the State of New York is revisiting plans to tax carried interest as ordinary income not capital gains for private equity firms based in New York. This effort was first initiated in April 2008 but is now being revisited as the state is seeking new revenue to reduce its budget deficit. Changes to the tax treatment are estimated to provide the state with an additional $50 million of revenue...Read more.
Change in Carried Interest Tax Dies in Senate
June 28, 2010 - Last week, the Senate failed once again to pass HR4213 - American Jobs and Closing Tax Loopholes Act of 2010, more commonly known as the “Jobs Extender” bill. Why is this important to private equity? Inside this bill is the language that changes the tax treatment of carried interest from capital gains to ordinary income...Read more.
 Volcker Rules Achieve Final Language: Bank Ownership of Captives Severely Limited
June 25, 2010 - Early this morning, members of a House-Senate conference committee reached an agreement on new financial regulation that includes language that limits the ability of banks to own captive private equity subsidiaries and requires certain private equity funds to register with the Securities and Exchange Commission...Read more.
Investor Pressure Leads to Concessions in PE Fund Terms & Conditions
June 21, 2010 - Private equity fund terms and conditions have drawn a lot of attention from institutional investors in the past year following the 2009 release of the ILPA Private Equity Principles, which set out a series of preferred terms for private equity funds. In order to assess current investor attitudes to fund terms, private equity research firm Preqin surveyed 50 institutional investors in private equity funds during May 2010. The results point to the need for private equity general partners to embrace the ILPA Private Equity Principles or face fund raising limitations...Read more (This article is premium content and is available to registered members only).
 Final Financial Reform Language to Require PE Registration and Oversight
June 16, 2010 - The final version of the financial reform legislation designed to better regulate financial services firms includes language that will create more oversight of private equity firms. The new requirements were designed to allow regulators access to information and to determine if private equity firms pose any systemic risk to the financial system...Read more (This article is premium content and is available to registered members only).
 As Returns Fall, Limited Partners Plan Changes to PE
June 14, 2010 -Limited Partners (LPs) are driving big changes to their private equity portfolios in response to new economic realities and dramatic falls in their overall returns from the asset class. The proportion of LPs who have made lifetime portfolio returns of 10% or less from private equity has jumped to 51% (from 22% in 2008, and 29% in 2009). Despite this drop in returns, investors have not lost faith in the asset class...Read more. (This article is premium content and is available to registered members only).
 Language Released That Targets Captive Private Equity Firms
June 11, 2010 -Today marked the start by members of the H.R. 4173 financial services bill conference committee to reconcile the House and Senate versions of the financial regulatory reform bill. This bill targets private equity by preventing banks from operating private equity subsidiaries and by putting in place new reporting requirements...Read more. (This article is premium content and is available to registered members only).
Carried Interest Tax Change to Pass Senate Next Week
June 10, 2010 -According to statements made yesterday by Senate Majority Leader Harry Reid (D-NV) the bill (The American Jobs and Closing Tax Loopholes Act of 2010) which contains language to tax carried interest as ordinary income, will be passed by the Senate sometime next week...Read more.
The Law of Unintended Consequences - Raising Carry Tax Could Cause Net Reduction in Tax Revenues
June 9, 2010 - The Private Equity Council released the results of a new study that tracks the correlation between tax rates and private equity investment. The study reveals that the pending proposal to more than double the tax rate on “carried interest” could reduce private equity investment in the US by $7 billion to $27 billion a year. Lower investment means less demand which equals lower valuations. This is turn leads to lower taxes revenues from taxing gains of the sales of businesses. So if the new PEC study is correct the effect of treating carried interest as ordinary income could result in a net reduction in tax revenues...Read more (This article is premium content and is available to registered members only).
Compromises on Carried Interest Spin in Senate
June 8, 2010 - It was reported this morning that Senate Finance Committee Chairman Max Baucus (D-MT) is pushing compromises to ease the impact of changes to how carried interest is taxed. On May 28, the House passed a bill that would require investment fund managers to treat 75% of carried interest as ordinary income. A transition rule would apply prior to January 1, 2013. The compromise by Senator Baucus would lessen this ratio...Read more.
NAIC: Why Carry is Capital Gains not Ordinary Income June 1, 2010 - The American Jobs and Closing Tax Loopholes Act aimed at changing the tax treatment of carried interest from capital gains to ordinary income and would tax the gain on the sale of an equity stake in a private equity firm as ordinary income not capital gains has been passed by The House of Representatives and now moves on to the Senate. Over the weekend, The National Association of Investment Companies (NAIC) called on Congress to oppose the proposed legislation and cites arguements that carry should be taxed as capital gains...Read more. (This article is premium content and is available to registered members only).
 Latest Stats Question Improving PE Market June 1, 2010 - In the first quarter of 2010, GF Data’s private equity universe deal activity was very much in line with the final months of 2009 – and therefore, according to the firm, not yet in line with the widespread impression of a freshening private equity market...Read more. (This article is premium content and is available to registered members only).
Carried Interest Language Expands: Gains on Sales of Equity Interests to Become Ordinary Income
May 27, 2010 - The American Jobs and Closing Tax Loopholes Act aimed at changing the tax treatment of carried interest from capital gains to ordinary income contains language that would tax the gain on the sale of an equity stake in a private equity firm as ordinary income not capital gains. The purpose of the language is to prevent stakeholders eligible to receive carried interest from monetizing their carried interest stream by selling their equity stake and having the gain taxed as a capital gain. The House of Representatives is scheduled to vote on the legislation today...Read more.
Tax on Carry to Trigger in 2011 not 2013 ... May 25, 2010 - We reported to you yesterday that the Ways and Means Committee had released the legislative text of the American Jobs and Closing Tax Loopholes Act. Within the Act were changes to how carried interest will be taxed. According to the Committee, 75% of carried interest would be taxed as ordinary income beginning in 2013...Read more.
Language for Treating Carry as Ordinary Income Released May 24, 2010 - Ways and Means Committee Chairman Sander Levin (D-MI) and Senate Finance Committee Chairman Max Baucus (D-MT) have released the legislative text of the American Jobs and Closing Tax Loopholes Act. The portion of the text that deals with changing the tax treatment of private equity reads as follows...Read more.
 Jonathan Nelson Defends Private Equity - May 24, 2010 - We have written many times that our industry has a serious private equity problem. We try as we can to parry back the naysayers with some occasional success. The fight has now been joined by Jonathan Nelson, CEO of Providence Equity Partners, as he was interviewed by on Tuesday May 18 by Charlie Rose on, of course, the “Charlie Rose” show on PBS...Read more.
 White House – “Changes in Carried Interest Tax to Pass Senate within Weeks” . May 13, 2010 - Yesterday at an industry conference sponsored by Reuters, Peter Orszag, the White House budget director, said that within the next few weeks he expects that the Senate will pass legislation that will change the tax treatment of carried interest...Read more.
 Senator Jack Reed Ups His Threat to Regulate Small Private Equity Funds
May 11, 2010 - On April 12 we reported to you that Senator Jack Reed (D-RI) had repeated his call for greater over sight of “private pools” of money. At that time he said that he would introduce an amendment to the financial regulatory bill moving through Congress that will require private equity firms, venture capital firms and hedge funds with more than $30 million under management to register and report to the Securities and Exchange Commission. Yesterday he more than followed through on his promise by...Read more.
 Travis Hain and Team Spin Out of BAML to Form New Private Equity Firm
May 7, 2010 - The Charlotte Observer reported yesterday that members of Bank of America’s captive private equity group are leaving the institution effective June 30th to form their own firm. The new group has agreed to manage the existing portfolio of investments held by Bank of America...Read more.
 Pervasive Gloom Lifts, Private Equity Activity on the Rise
May 6, 2010 - After 18 months of pervasive gloom, dealmakers are increasingly more positive about the M&A environment, according to the twice yearly ACG-Thomson Reuters DealMakers Survey. While the last three surveys were consistently dreary, with more than 80% of dealmakers reporting a fair to poor M&A environment, the most recent survey reports that 85% of dealmakers expect an increase in M&A activity in the next six months. A year ago, only 56% predicted an increase in M&A activity...Read more.
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Former Merrill Lynch Capital Execs form New Middle Market Finance Company
May 4, 2010 - Companies backed by private equity investments provide jobs for more than six million Americans, or more than five percent of all private-sector workers, according to a new analysis released today by the Private Equity Council... Read more.
April 22, 2010 -AXA Private Equity announced yesterday the acquisition of a $1.9 billion portfolio of limited partnership interests in private equity funds from Bank of America. This represents one of the largest secondary private equity transactions in history. This transaction involves a high quality, mature buyout funds portfolio... Read more.
April 22, 2010 -Building on strong momentum from a healthy 2009 holiday shopping season, global luxury goods industry revenues will increase 4% from $205 million in 2009 to a projected $211 million for 2010; this according to the newly-released Spring 2010 update of Bain & Company’s “Luxury Goods Worldwide Market Study”... Read more.
 ComVest Realizes 97% IRR on Sale of Allegiant
April 15, 2010 -The ComVest Group announced today the final sale of Allegiant Travel Company. ComVest initially realized on a portion of its interest as a selling shareholder upon Allegiant’s initial public offering in December of 2006, then again in subsequent secondary sales. As of the final sale, ComVest has realized a multiple of 6.3 times invested capital and an IRR of 97.3%... Read more.
April 15, 2010 -Rothstein Kass, an accounting and advisory services firm, today introduced "Heading for the Exits: Preparing for the Sale of a Family Business," a survey report that evaluates the near- and intermediate-term outlook for family-owned enterprises considering the sale of a majority stake. This two-part report includes the findings of a survey of 382 C-level executives of first-generation, family-owned enterprises that were actively considering sale of a majority stake in their companies. A link to a free copy of the report is available at the end of this article... Read more.
 Private Equity Leads the Way in IPO Momentum
April 14, 2010 - Issuers are showing renewed confidence in the US IPO market according to the PricewaterhouseCoopers' quarterly IPO Watch. PwC forecasts that growth in the IPO market that began in the second half of 2009 is expected to continue through the remainder of 2010. Private equity firms have been active participants in the surge in IPO’s... Read more.
 Private Equity Bounces Back
April 8, 2010 -While 2009 was a challenging year for private equity on all fronts, it has offered a window into the industry’s flexibility in adapting to a changing economic environment. 2010 is already exhibiting more robust global private equity activity as funds look to invest and divest in a more stable economic setting. So says Ernst & Young in a new private equity report... Read more.
 Friend Skoler Scores 40% IRR on Sale of Slime
April 7, 2010 -Friend Skoler & Co., a mid-market private equity firm, has completed the sale of one of its portfolio companies, Accessories Marketing (which does business under the name of Slime) to Illinois Tool Works. The sale generated an internal rate of return in excess of 40% on invested capital for Friend Skoler and its investors during their three and one-half years of ownership. The transaction closed on April 1, 2010... Read more.
Lots of Mid-Market Dealflow on the Way Over the Next Five Years
April 7, 2010 - As the economy continues to recover, most CEOs interviewed for PricewaterhouseCoopers' Private Company Trendsetter Barometer survey have plans to monetize the value of their business, many of which are developing plans to exit their businesses over the next 5 years. The time frame for monetizing the value of their business is reasonably short-term: 38 percent over the next 5 years and 36 percent in 6 years or longer... Read more.
 PNC Equity Partners Hits 7.6x Cash Return on Tangent Rail
April 6, 2010 - PNC Equity Partners announced today the sale of its portfolio company Tangent Rail Corporation to Stella-Jones for an aggregate purchase price of approximately $165 million. The sale of Tangent Rail, along with previous dividend recapitalizations, yielded a 7.6x cash-on-cash return on PNC Equity Partner's initial investment and a gross internal rate of return of 98 percent... Read more.
April 6, 2010 -During the first quarter of 2010, U.S. private equity fund-raising dipped to $17.6 billion raised by 97 funds, an 8% drop from the $19.1 billion raised by 75 funds during the same period last year, according to Dow Jones LP Source. When the most recent quarter's totals are compared to the $65.9 billion raised by 108 funds during same period in 2008 the numbers show how hard the industry has been hit by the economic downturn and credit crunch... Read more.
April 5, 2010 - Preqin’s quarterly dealflow data shows a total of 307 private equity deals announced in Q1 2010, with an aggregate value of $26.6 billion. This represents a 35% decrease from Q4 2009, which saw 349 announcements with an aggregate value of $41.2 billion. However, dealflow for Q1 2010 is stronger than the first three quarters of 2009, with the aggregate deal value double that of Q1 2009... Read more.
April 5, 2010 -Private equity-backed companies weathered the “Great Recession” significantly better than comparable businesses, according to a new study by the Private Equity Council. “This study is an important contribution to an informed discussion about private equity ownership,” said PEC President Douglas Lowenstein. “The low default rate is another indicator that undercuts popular myths about private equity ownership and suggests that private equity firms are effective at steering companies through troubled times.” A link to a free copy of the study is available at the end of this article... Read more.
 Private Equity Performance Continues to Improve
March 18, 2010 - Preqin has released its performance data for the private equity industry as of September 30th 2009 and the results reveal that private equity performance is improving, with returns and fund valuations up from Q2 2009. Compared to public indices, private equity is still performing well over the longer term but is outperformed over the one-year period... Read more.
March 17, 2010 - California State Teachers’ Retirement System (CalSTRS) officials today announced Margot Wirth as director of the $16.8 billion private equity portfolio. Ms. Wirth assumes her duties today and will direct a staff of 20 who manage the private equity portfolio, which accounts for 12.7% of the $133 billion CalSTRS investment portfolio as of February 28, 2010... Read more.
March 16, 2010 - The Sterling Group, a Houston based middle-market private equity firm, has held a final closing of its third fund, Sterling Group Partners III, L.P., at $820 million. Fund III, raised in 10 months and oversubscribed, closed significantly above its $600 million target... Read more.
 Mason Wells Has Strong First Close
March 16, 2010 - Mason Wells has completed a first closing on its $500 million third investment fund, Mason Wells Buyout Fund III, LP. According to an SEC Form D filing submitted to the SEC in late February, the firm closed on $325 million from a group of 18 investors... Read more.
March 15, 2010 - According to a new Bain & Company 10-year study of more than 2,000 companies nearly all businesses that consistently create value above and beyond their cost-of-capital are market leaders in their core businesses, yet only one-in-ten companies studied distinguished themselves as Sustained Value Creators, companies that generate more than 5.5% growth in both revenues and profits, compounded annually, and earned back their cost of capital... Read more.
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 New Mezzanine Firm to Invest in Florida Companies
March 12, 2010 - A new investment partnership, Florida Mezzanine, was organized in January and has access to $450 million in capital to invest in companies with operations in the Southeast US. The firm has already closed on two investments; Great HealthWorks, a Fort Lauderdale-based marketing and distribution company and Association Financial Services, a Miami-based financial services company for condo and homeowner associations...Read more.
March 12, 2010 - Mega private equity firm KKR has been going public for a very long time. We first reported on this news back in July 2008. With the financial markets finally settling down it appears that KKR is now really serious about going public. The firm filed a new Form S-1 with the SEC yesterday... Read more.
 Four Pearls from Warren Buffett that You Can Apply to Private Equity
March 5, 2010 - In his annual letter to shareholders, Warren Buffett always provides a few folksy stories which can be useful in defining good, bad and stupid behaviors. One of his more famous pearls refers to the ups and downs of the markets – “It's only when the tide goes out that you learn who's been swimming naked." Here are four more wisdom makers from Mr. Buffett’s annual letter... Read more.
March 3, 2010 - Livingstone, a mid-market investment banking firm, has hired Andrew Bozzelli and Connor Mitchell to the firm’s growing Chicago team. The firm expects to continue to hire throughout 2010... Read more.
February 25, 2010 -On Tuesday, February 16, 2010 the Investment Committee of CaLPERS met to review recent investment transactions, the investment performance of both internal and external managers and to discuss and establish investment policies and strategies. Part of the meeting covered a review of CaLPERS Alternative Investment Management (AIM) Program. Private Equity Professional Digest has obtained a copy of the Power Point slide presentation used for this meeting. A link to a free download of the presentation appears at the end of this article... Read more.
Evercore Enters Placement Agent Sector with Acquisition
February 24, 2010 - Evercore Partners, an investment banking advisory firm, has entered the private equity placement market with the acquisition of key assets of the Private Funds Placement Group of Neuberger Berman. As part of the agreement Neuberger Berman will receive earnout payments which provide them with an economic interest in the success of the group for a period of time... Read more.
Seat Belt Safety and Private Equity
February 23, 2010 - Since launching the Digest in 2007 we have only promoted two non private equity videos. So, for only the third time in just over three years we are exercising some journalistic privilege. The following story has nothing to do with private equity but it may just bring a tear to your eye and perhaps save your life one day. This just over one minute, seat belt safety video has gone viral on the internet with more than 1 million YouTube views. After watching the video you’ll quickly know why. The video has been described as both effective and beautiful which seems to be an impossible combination for a seat belt safety video. Yet, in that one short minute, the video will make your eyes a bit watery, give you goose-bumps, make you give your wife or husband and kids a hug, and possibly save your life... Read more.
 Middle Market Deal Volume Creeping Upward
February 22, 2010 - GF Data Resources’ latest Middle Market Report indicates a modest but pronounced uptick in completed deal volume in 4Q, closing out a cautious year for middle market dealmaking, with just 65 transactions completed in the GFDR universe in 2009, compared to 124 in 2008, and 158 in 2007... Read more.
February 19, 2010 - A new report from Cambridge Associates shows that during the quarter ending September 30, 2009, private equity and venture capital recovered some of the losses they had incurred in 2008 and early 2009, with each asset class logging its best performance since 2007. However, as in the previous quarter, public equity indices outperformed both, though for time horizons of three years and longer, private equity and venture capital returns continued to be significantly better than those of public equities... Read more.
Most Institutions to Make New PE Investment in 2010: Small to Mid-market Buyout Funds Preferred
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.
 Private Equity Firms Can Survive Only Through Operational Value Creation
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 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.
 New Report Reveals Dominance of Middle-Market
January 29, 2010 - A new report by PitchBook reveals that middle-market activity dominated private equity deal-flow in 2009. The report also revealed a notable improvement in deal flow, capital investment and middle-market valuations and IPO exits in the 4th quarter. A link to a free copy of the report is available at the end of this article... Read more.
January 26, 2010 - After a difficult first half of 2009 in which new issuance plummeted and secondary price levels reached record lows, the U.S. leveraged loan market began to show signs of recovery during the second half of the year, according to Fitch Ratings... Read more.
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 The Surprising Top Six Criteria for Investing in a PE Fund
December 8, 2009 - Institutional investors remain committed to private equity investing, but seek greater portfolio transparency and higher quality reporting from managers amid growing liquidity and performance concerns, according to a survey report released today by SEI. In a report on the survey's findings, SEI asserts that private equity managers who standardize and institutionalize transparency practices will be most likely to retain and capture assets because they will create efficiencies while delivering a more consistent and enhanced client experience...Read more.
 BOOM! Deal Fuse Reaches End and Middle Market Valuations Decline
November 24, 2009 - GF Data Resources has completed its latest review of middle market private equity transactions. The report indicates a decline in aggregate valuation multiples of middle market transactions completed in the third quarter. The results suggests that sale of high-quality businesses, valued at pre-downturn multiples, are now being accompanied by the sale of moderate quality businesses that are compelled to accept valuations at lower multiples...Read more.
BackBay Communications Issues Private Equity Brand Survey
November 19, 2009 - A new survey of the private equity industry by BackBay Communications, a strategic financial services marketing and public relations firm, reveals that 93% of industry participants believe a private equity firm’s success is directly dependent upon a strong brand. A link to a free copy of a report “Private Equity, Brand Equity”, detailing the survey’s results is available at the end of this article...Read more.
 Oaktree’s Howard Marks and the Seven Dirty Words
November 17, 2009 - Howard Marks, the Chairman of Oaktree Capital Management, is well known for his insightful memos to his investors. And his latest memo, which discusses the causes of bubbles and what we can do about it (maybe nothing), is no exception. His write-up is required reading for all of us that make our living in the investment world. A link to a PDF of his full memo is available at the end of this article...Read more.
 Senate Banking Committee: Private Equity Exempted from New Regulations
November 11, 2009 -Yesterday the Senate Banking Committee, led by Chairman Chris Dodd (D-CT), passed its latest version of new regulations design to monitor and control the financial markets in the United States. The most important part of the newly proposed regulations is that private equity firms, regardless of size, would be exempted. Links to a summary and a full dfraft of the regulations are available at the end of this article...Read more.
 New Private Equity Firm Sets up Shop in New York
November 11, 2009 - A new private equity firm was formed yesterday when Gotham Private Equity Partners announced its formation as a New York-based private equity firm focused on middle-market and lower middle-market companies...Read more.
BDO Seidman: Expect Carried Interest to be Taxed as Ordinary Income in 2011
November 10, 2009 - According to a new study by BDO Seidman two-thirds (67%) of private equity executives surveyed expect the government’s new tax proposal on carried interest to pass. Private equity executives report that the passage of the proposal, which would raise the tax on carried interest from the current 15% capital gains rate to 39% starting in 2011 (Carried Interest Tax is Back Again (Actually It Never Left)), will reduce the ability of funds to attract and retain top talent, dilute the competitive position of US-based private equity firms and create additional administrative burdens...Read more.
 BMO Taps New Head of U.S. Financial Sponsors Group, Identifies Future Trends for PE
November 4, 2009 - BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group, has appointed Dirk Leasure as Head of its Financial Sponsors Group. Based in New York, Mr. Leasure will lead a team of investment bankers based both in New York and Chicago...Read more.
IPO Pipeline Surges
October 29, 2009 - The IPO pipeline increased to 34 registrants seeking to raise $10.9 billion as of September 30, 2009, up from 28 registrants seeking to raise $7.6 billion at the end of Q2 (June 30, 2009), according to the quarterly Ernst & Young LLP US IPO Pipeline study...Read more.
New Law to Regulate Private Equity Passes Committee, Smaller PE Firms Exempted
October 28, 2009 -Back on October 2nd we reported to you that new legislation, the Private Fund Investment Advisers Registration Act, had been introduced in the House of Representatives that would require private equity firms and hedge funds to register with the SEC, submit to periodic examinations and maintain new recordkeeping and adhere to new disclosure requirements. Yesterday, the House Financial Services Committee passed H.R. 3818, the Private Fund Investment Advisers Registration Act by a vote of 67-1. However, important exceptions to the new law were written in prior to passage...Read more.
 Nearly 1 in 3 Private Equity Firms Have a Portfolio Company in Bankruptcy
October 27, 2009 - According to a new BDO Seidman study, half (51%) of private equity executives surveyed say the overall value of their portfolio has decreased during the past year, and 56% say that more than 20% of their portfolio is performing below forecast or expectations. Nearly three in ten (28%) have declared bankruptcy for one or more portfolio companies, and 38% have engaged a turnaround professional...Read more.
October 21, 2009 - Steve Rattner, the head of President Obama’s car czar team and the former head of the Quadrangle Group, has written a long article in Fortune Magazine (“The auto bailout: How we did it”) where he recaps how he and his team navigated GM and Chrysler through ultra fast bankruptcies. Mr. Rattner is particularly critical of the management team at GM (arrogance, private elevators and power point presentations were all in attendance)...Read more.
 Jon Moulton Forms New Private Equity Firm October 21, 2009 - Bloomberg reported yesterday that Jon Moulton, who quit Alchemy Partners in early September, has launched a new firm to invest in distressed companies in the UK. His new firm is called Better Capital...Read more.
 New Industrial Focused Investment Bank Formed in Chicago
October 15, 2009 -The Investment Banking group of InterOcean Financial Group has formed InterOcean Advisors LLC, an independent investment banking firm based in Chicago that provides M&A and capital raise advisory services. The new firm will be headed by Managing Directors Bill Doepke and Bob Wujtowicz and will continue to be narrowly focused on the manufacturing sector and related industrial services sectors...Read more.
Carried Interest Tax is Back Again (Actually It Never Left)
October 14, 2009 -Bloomberg reported yesterday that the House Ways and Means Committee, headed by Congressman Charles Rangel, will renew its efforts to tax carried interest at ordinary income tax rates...Read more.
Battered IPO Market Recovers Slightly in Third Quarter
October 13, 2009 -In the third quarter of 2009, United States initial public offerings (IPOs) recorded the highest quarterly proceeds and number of deals since the first quarter of 2008, with 20 offerings that raised $5.8 billion. The new IPO statistics were announced by PricewaterhouseCoopers’ Transaction Services practice...Read more.
Grant Thornton: Why the US IPO Market is in Decline and How We Can Fix It
October 7, 2009 -Grant Thornton’s Capital Markets Group has released a new report titled “Market Structure is Causing the IPO Crisis”, which examines the demise of initial public offerings in the United States and offers remedies to resurrect the IPO market. The paper is a follow up to Grant Thornton’s original study, “Why are IPOs in the ICU?” which was published in November 2008. A link to a free copy of the new white paper is available at the end of this article...Read more.
New Regulations Proposed For Private Equity, Venture Capital Firms Exempted
October 2, 2009 -We all knew it was coming but now it is here. New legislation introduced yesterday in the House of Representatives will require that private equity firms and hedge funds register with the SEC, submit to periodic examinations and will impose new recordkeeping and disclosure requirements. Interestingly, venture capital firms are specifically exempted from the new requirements...Read more.
David Rubenstein – “Our industry will be stronger than it was just a few years ago”
October 2, 2009 -Yesterday, Bloomberg TV interviewed Carlyle Group co-founder David Rubenstein. The video interview runs about 3 minutes and is well worth your time. The link to video appears at the end of this article...Read more.
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