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Private Equity Golden Age

admin — Wed, 23 Sep 2009 17:10:00 +0000

Private Equity Golden Age

Silver Lake CEO Predicts Private Equity “Golden Age”

The CEO of Silver Lake, a large private equity firm focused primarily in technology and growth industries, has a rosy prediction for the near future of private equity. Silver Lake CEO and co-founder, Glenn Hutchins, forecasts “The financial markets may be on the cusp of a new ‘golden age’ for private equity.”

The financial crisis which has brought ruin to many private equity firms and their portfolio companies may now be ending as credit markets open up and the stock markets recover. Hutchins points out some important and promising indicators but he does not provide a clear explanation for why it will be a “golden age” rather than simply a return to average private equity activity. After all, even a very modest recovery in the industry will be seen as a significant improvement but it would still fall short of the boom a few years back.

“Now that the sort of panic of ’08 is over and capital markets seem to be returning to some degree of normality … companies will be able to access debt and equity markets like they have in the past. And that is no surprise,” Hutchins said.

But he added that investors needed to be mindful that valuations in 2007 should not be defined as normal. They were an “overshoot in another way,” he said.

“Now risk premiums are at attractive levels. Investors are being paid to take risk again. That means when you look back on this, when you get back to economic recovery, this will have been a good time to invest,” Hutchins said.

“If you need financial engineering to enter a deal and multiple expansion to exit a deal, then your business is fundamentally challenged,” Hutchins said. Source

Read more about Silver Lake at our Private Equity Tracker profile.

Private Equity Industry Update

admin — Fri, 11 Sep 2009 15:47:00 +0000

Private Equity Industry Update

Private Equity Industry Video Update | THL Partners

Following yesteday’s look at the “new normal” of private equity, here is a good video update on the private equity industry from a partner at a major private equity firm. The economic recovery is still very shaky and private equity firms and investors are having to decide when is the right time to get back in the market again. Scott Sperling of Thomas H. Lee Partners, one of Boston’s largest private equity firms, says his firm is aggressively looking for new opportunities especially in the services and business outsourcing sector as well as retail but that this recovery is “fragile.” He also mentions the gap in valuation between what the company is valued at in the public market and what private equity firms think it is actually worth. E-mail subscribers can watch the video here.

Companies are still valued higher than private equity firms are willing to pay, and in order to pay 7-9 times cash flow Sperling says he must be certain that the economy is stable. Part of this may be a hope on the buyout side that these companies would be willing to sell for less than they are worth due to economic pressure. Sperling closes with the negotiations between the FDIC and private equity firms and the recent regulation, advocating strongly for lowering the reserve requirement so that private equity firms and their companies are not competitively disadvantaged.

See our tracker profile of Thomas H. Lee Partners
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Tags: private equity investors, private equity update, news, trends, industry data, one year later private equity, 2009, 2008, economic crisis, private equity fdic, banks, fdic regulations, capital

Hedge Fund Investors Lock Up

admin — Thu, 03 Sep 2009 14:15:00 +0000

Hedge Funds Investors Lock Up

Cerberus Funds Set Strict Lock Ups for Investors

Cerberus is launching two new hedge funds and these funds may bar investors from withdrawing their money for at least 3 years in exchange for lower management fees. Cerberus’ two multi-billion dollar funds will specialize in distressed investments. The use of a lock up period is controversial because investors are unable to take their investment out if the fund starts to do poorly. Yet managers insist that it will be better long-term because it allows a hedge fund to invest without fear that limited partners will take back their pledged capital. Lock ups are employed so that investors do not leave a fund en masse causing it to collapse or sell assets for a low price in a down market. Watch the video here:

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Tags: Hedge Fund investors, lock up period, withdrawal, hedge fund withdraw, limited partner lock ups, lock up investors, capital, term agreements

Raising Capital for a Fund Startup

admin — Thu, 25 Jun 2009 18:45:00 +0000

This article below was first published on HedgeFundStartupGuru.com. Last week I moderated a panel discussion in new york on capital raising and how starting a fund is really starting a small business. The discussions were great and while everyone knows that capital is hard to raise some good tips and investor feedback came out of the event. We hope to do more of these in the future, stay tuned for Hedge Fund Group (HFG) event announcements for Chicago next month and Moscow, Russia this September. Below please find an article on hedge funds tar

The gyrating financial markets have proven difficult for even the most experienced alternative-investment managers to navigate over the last year, but startup hedge funds and commodity trading advisors now confront an even tougher challenge: convincing investors to entrust them with their money.

In the wake of 2008 – the hedge fund industry’s worst year on record – fledgling funds face gun-shy investors and tougher competition for the assets that are available, amid a fickle market that has made it tough to put up the numbers that made hedge funds famous. Adding to the problem are the effects of … source

For related resources please see HedgeFundStartupGuru.com, ThirdPartyMarketing.com and our own Hedge Fund Marketing & Sales Guide and Hedge Fund Startup Guides.

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Tags: Hedge Fund, Raising capital, capital, hedge funds, private equity, alternative investments, starting a fund, raising capital for a new fund, fundraising tips and advice

Recent Hedge Fund Developments

admin — Wed, 03 Jun 2009 15:22:00 +0000

Recent Hedge Fund Developments

Here are a series of recent videos released on developments within the hedge fund industry. If you are viewing this video through our daily hedge fund email newsletter please click here now to watch the embedded videos below.

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Tags: hedge funds, hedge fund, private equity, alternative investments, investments, equity, stock markets, investment funds, capital

Lone Pine Capital Hedge Fund | Stephen Mendel Jr. Exclusive Tracking

admin — Thu, 20 Nov 2008 04:25:00 +0000

Lone Pine Capital

Lone Pine Capital 13F Holdings Analysis

This post is being written as part of HedgeFundBlogger.com’s Investment Securities Tool which analyzes the holdings of hedge fund managers. Below are Q3 Holdings details as filed by Lone Pine. These are by there very nature outdated as they represent only some of the hedge funds holding at one point in time.

Please click on the image below to view a list of securities which Lone Pine Capital has purchased since their last filing.

Please click on the image below to view a list of securities which Lone Pine Capital has partially or completely sold since their last filing:

The securities listed within this most recent 13F filings included:

America Movil Sab De Cv (AMX)
Mastercard Inc (MA)
Pricelinecom Inc (PCLN)
Qualcomm Inc (QCOM)
Sandridge Energy Inc (SD)
Visa Inc (V)
Weatherford International Ltd (WFT)
Xto Energy Inc (XTO)
Crown Castle International Corp (CCI)
Dolby Laboratories Inc (DLB)
First Horizon National Corp (FHN)
Hansen Natural Corp (HANS)
National City Corp (NCC)
Precision Castparts Corp (PCP)
Deltek Inc (PROJ)
Amazoncom Inc (AMZN)
Brookfield Asset Management Inc (BAM)
Cb Richard Ellis Group Inc (CBG)
Entergy Corp (ETR)
Google Inc (GOOG)
Illumina Inc (ILMN)
Infosys Technologies Ltd (INFY)
Monsanto Co (MON)
Dicks Sporting Goods Inc (DKS)
Eagle Materials Inc (EXP)
Fastenal Co (FAST)
Msc Industrial Direct Co (MSM)
Saic Inc (SAI)
Teradata Corp (TDC)

Source: SEC 13F Filing | MFFAIS

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Tags: Lone Pine Capital, Lone Pine Capital Partners, Lone Pine Capital Management, Lone Pine Hedge Fund Holdings, Securities owned by Lone Pine Capital, Stephen Mendel Jr., Stephen Mendel Junior Hedge Fund Manager

Private Equity Funds in the Financial Crisis

admin — Tue, 28 Oct 2008 20:26:00 +0000

Private Equity in the Financial Crisis

Starting a Private Equity Fund in the Financial Crisis

While the current financial crisis has in some ways limited private equity, primarily by reducing a private equity firm’s ability to leverage a buyout, the crisis could also yield huge returns to private equity firms that start funds for buying up profitable assets. Dwight Bush hopes that his new private equity fund will thrive by identifying and purchasing profitable assets at low prices from the government and other funds.

Making the Best of a Bad Situation
The financial crisis could be very profitable for private equity funds. At least this is the bet that some investors are making, hoping to capitalize on the weak assets available by fixing them up and selling them for a profit. One such optimist is Dwight Bush, an experienced corporate banker who is setting up a private equity fund, he is also the subject of a recent Washington Post article. One might wonder why he chose this bad economic period to start a private equity fund, or how he plans to raise capital from “cash-strapped” investors and more importantly how he hopes to give his Limited Partners more money than initial investment? Here are his basic answers to these questions:

Why choose a financial crisis to start a private equity fund?

Bush: “What we know is that the last time we had a mortgage meltdown, there were great fortunes made,” Bush said. “In this type of fragmented environment, those people who can identify good assets that are undervalued . . . people like Joe Robert . . . and that can work with those assets over time to help realize their true value” will make lots of money.”

What is his strategy for his private equity fund?

Bush: He said the private-equity fund plans to do two things: manage assets that the federal government buys from banks and buy assets that the “Paulson Plan” auctions, then fix them up and sell them — hopefully at a profit.

Additionally, he hopes to make money of hedge funds dishing out assets at fire-sale prices. Some $43 billion came out of the hedge fund market in September because investors are demanding their money. Bush said hedge funds are selling off quality assets, from manufacturing companies to farmland to commodities, at low prices so they can give cash to their impatient investors.

Okay, sound strategy, but where will the private equity fund get money to buy the assets?

Bush: “Remember one thing,” he said. “Every month, pension funds take in money and pension funds have an obligation to pay their retirees over time. So new capital is available in the market every month and the money has to be put to work.”

What about the private equity buyout model based on leverage in light of the current credit crunch?

“In the short term, private-equity firms will tend to work more with strategic partners, and the assets acquired will be less leveraged,” he said. “Over the long term, you’ve got to remember that banks have to lend to make money and that this too shall pass. My view is that the current situation should reach bottom some time in early to mid-2009, and by 2010 we should have a more robust economy again.”

Dwight Bush presents a strong argument for why private equity can endure the financial crisis with what he sees as eternal investment capital (pension funds) and long-term lending from banks that necessarily lend in order to make money.

Tags: Private Equity, Private Equity Fund, Financial Crisis, Private Equity Funds, Private Equity Fund manager, Dwight Bush, Private Equity and the Credit Crunch, Private Equity Fund Management, Private Capital

Greenlight Capital | David Einhorn 13F Hedge Fund Holdings

admin — Tue, 23 Sep 2008 11:55:00 +0000

Greenlight Capital

Greenlight Capital | David Einhorn Holdings

This post is being written as part of HedgeFundBlogger.com’s Investment Securities Tool which analyzes the holdings of hedge fund managers.

Please click on the pictures below to view details regarding Greenlight Capital’s Q3 2008 13F Filing:

Built Up Security Positions (click to view):
New Security Positions (click to view)
No Change to Security Positions (click to view):
Security Positions Cleared (click to view)
Position Reductions (click to view)
Securities mentioned within this Q3 13F Filing:

Ameriprise Financial Inc (AMP)
Biofuel Energy Corp (BIOF)
Covidien Ltd (COV)
Dana Holding Corp (DAN)
Echostar Corp (SATS)
Einstein Noah Restaurant Group In … (BAGL)
Emc Corpmassachusetts (EMC)
Employers Holdings Inc (EIG)
Energy Partners Ltd (EPL)
Guaranty Financial Group Inc (GFG)
Health Management Associates Inc (HMA)
Helix Energy Solutions Group Inc (HLX)
Kinross Gold Corp (KGC)
Mdc Holdings Inc (MDC)
Mercer International Inc (MERC)
Mi Developments Inc (MIM)
Microsoft Corp (MSFT)
Patriot Coal Corp (PCX)
Pomeroy It Solutions Inc (PMRY)
Republic Airways Holdings Inc (RJET)
Sears Holdings Corp (SHLD)
Target Corp (TGT)
Teradata Corp (TDC)
Triple-S Management Corp (GTS)
Tyco Electronics Ltd (TEL)
Unitedhealth Group Inc (UNH)
Urs Corp (URS)
Verasun Energy Corp (VSE)
Walgreen Co (WAG)
Wellpoint Inc (WLP)

Read over 100 securities analysis articles here: Securities Analysis Guide.

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Eurasia Capital Management

admin — Mon, 01 Sep 2008 10:56:00 +0000

Eurasia Capital Management

Eurasia Capital Management – Hedge Fund Press Bio

Below is a press bio on Eurasia, they are the first group to offer a Mongolia-centric hedge fund product. I expect these types of announcements to greatly increase as the barriers to trading in countries such as this drop, hedge funds look for a distinct advantage and traditional “emerging” countries such as China and Brazil fully emerge.

The following piece on Eurasia Capital Management is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund related announcements please see our Hedge Fund Tracker Tool

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Eurasia Capital Management plans to increase the world’s first Mongolia-focused fund fivefold to $100 million to tap economic growth fueled by the nation’s mining industry.

Eurasia’s hedge funds, which have about $200 million of investments across Central Asia, also expect to sell shares on London’s Alternative Investment Market or Deutsche Boerse AG by next June, said Alisher Djumanov, managing partner of the Singapore-based firm. Proceeds would be used to start private- equity and property funds, and expand in Central Asia, he said.
Mining in Mongolia, which has reserves of coal, copper, gold and uranium, will spur “double-digit” economic growth rates over the next 10 years as commodity prices remain high, Djumanov said in an interview. Mining accounted for about two- thirds of Mongolia’s exports last year, and foreign direct investment in the country rose more than 33 percent.

“The spillover effect from the mining sector will be significant,” Djumanov, 35, said. “We’re investing in companies that are expected to grow significantly on the back of this strong economic growth.” Read more…

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Tags: Eurasia Capital Management, Mongolia, Alternative Investment Market, Deutsche Boerse AG , Alisher Djumanov, MSCI World Index,Investments in Mongolia, Mongoalia Investment, Mongolia Investment Fund, Eurasia hedge fund

Thames River Capital

admin — Fri, 29 Aug 2008 20:49:00 +0000

Thames River Capital

Thames River Capital, Hedge Fund Notes

While this is spun in a neutral or even partially negative way it looks like a positive note to me. Closing at $1B or even less due to operation constraints or availability of investments is common.

The following piece on Thames River Capital is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund related announcements please see our Hedge Fund Tracker Tool.
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Thames River Capital’s Warrior Fund, a multi-strategy fund of hedge funds, has reached $1.1 billion and is now closed to new subscriptions. The Warrior Fund, which has exposure to directional and non-directional hedge funds such as the Paulson Credit Opportunities fund and the CQS Directional Opportunities fund, finished July down 2.82%, bringing its year-to-date loss to 2.07%.

The fund of funds is on pace to its worst year ever since inception in January 2003. It finished 2007 up 27.35%. “The short term remains choppy but we do believe this is one of the best times to selectively invest given the dislocations witnessed in the financial markets across almost all asset classes and geographical regions,” said Ken Kinsey Quick and Alex Kuiper, co-portfolio managers. Read more…

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Tags: Thames River Capital, Warrior Fund, Paulson Credit Opportunities fund, CQS Directional Opportunities fund, Ken Kinsey Quick, Alex Kuiper