Third time could be lucky for systemic risk effort 6 Aug 2008 A powerful Wall Street group has called for stronger rules and institutions for complex derivatives to minimise systemic risks. Two previous attempts had mixed success. But the current crisis could focus minds enough to give needed reforms a better shot at implementation.
Alternative asset managers look run-of-the-mill 6 Aug 2008 GLG, OchZiff, and Blackstone said asset growth slowed or worse last quarter. That's not surprising. But they trade at a premium to traditional asset managers partly because of faster anticipated growth. The overall weakness in raising new funds could start changing that.
Second chances drying up on Wall Street 5 Aug 2008 Failure may be the best teacher, but willingness to grant second chances is a cyclical phenomenon in finance. Poor returns across the hedge fund spectrum left the ground infertile for a new fund led by tarnished Merrill star Dow Kim.
Stock exchange wars will cause casualties 1 Aug 2008 The London Stock Exchange has cut trading costs. It was partly a preemptive strike against Turquoise, due to launch on August 15. Other exchanges are already snapping at the LSE s heels. As competition hots up, there s unlikely to be enough business for everyone to survive.
Boom-time adventures could haunt big names 1 Aug 2008 Carlyle s dabbling in a couple of hedge fund areas didn t pan out. It may take a reputational hit. But at least it didn t drag too many investors into its experiments. Cerberus, once a distressed investing shop, went deep into private equity and could end up paying for it.
KKR is worth only $9bn, stock market says 31 Jul 2008 The buyout titan is arguing it s worth $12bn$15bn as part of clever plan to merge with its European affiliate. But it may have been too clever by half. Based on a readacross from that affiliate s share price, KKR is worth a lot less.
Are CDS traders ready for exchange trading? 31 Jul 2008 Not yet. But they ve committed to using a central clearing house for credit default swap index trades by the end of the year. The goal is to reduce the need for another rescue like Bear Stearns. More prosaically, it could end up letting exchanges into the lucrative CDS world.
How KKR is taking the O out of IPO 30 Jul 2008 The private equity firm will list on the NYSE without offering shares. It is eliminating the IPO risk by buying an overlapping business that is relatively cheap and has a readymade investor base. It s a clever structure that avoids selling stock in a weak market.
Bankruptcy could be meal ticket for legal eagles 30 Jul 2008 New York bar exam candidates might be discouraged by news of legal layoffs in the Big Apple. But tough economic times trigger company failures. It may not be sexy and it won t save the world but if there's a consistent winner in the bankruptcy business, it's the lawyers.
KKR makes big fuss over a couple of dollars 29 Jul 2008 That s the pershare value of the unusual contingent value interest the US buyout firm is waving in front of investors in KPE, the vehicle it wants to buy out. There s a heap of fine print attached too. Investors should probably just ask for their dollar in cash.
ABS vulture funds are ravenous – for now 29 Jul 2008 Dozens of firms have raised perhaps $100bn between them to buy distressed paper. But not all will be gifted the funding leverage Lone Star and Blackrock got from Merrill and UBS. That makes soaking up $1tr or more of problem assets harder. Potential sellers shouldn t wait around.
KKR’s $15bn self-valuation looks optimistic 29 Jul 2008 KKR wants investors to ignore its reported figures in favour of rather optimistic adjusted earnings calculations. But a more realistic analysis brings down its value. A comparison with listed rival Blackstone points to a valuation nearer $10bn.
KKR prefers Blackstone’s valuation to its own 28 Jul 2008 Well, to that of KPE, anyway. Rather than deducing its own value from its listed subsidiary's, KKR is pegging its worth against its peers. That enables it to say it s paying a premium for KPE before going public itself but it s an opportunistic and rather circular calculation.
JPMorgan Cazenove goes outside for new CEO 28 Jul 2008 Naguib Kheraj isn't coming to revolutionise the banking joint venture, which has a distinguished past and a more doubtful future. But Kheraj, whose last fulltime job was finance director at Barclays, must deal with some big questions, not least whether the entity will survive.
KKR’s reverse float puts shareholders in a bind 28 Jul 2008 The buyout firm will swallow its listed KPE subsidiary, and relist the whole group in the US. Despite some concessions from KKR, KPE shareholders will have to trust a valuation that looks more like art than science. And unlike a regular IPO, the buyers can t easily say no.
UK companies and investors need to fight more 28 Jul 2008 The biggest investor in the UK stock market, Legal & General, thinks more UK bank chiefs should quit. But there s little sign of heads rolling. That s partly because UK companies increasingly ignore investors. Both sides should reengage in public.
Paulson unveils another damp squib 28 Jul 2008 The US Treasury secretary is right that covered bonds can be a good way to fund mortgages. But their use didn t prevent property busts in Spain and the UK. And pushing for them in the middle of a housing bust won t do much, if anything, to kickstart the market in the US.
Fed has upper hand in turf battle 25 Jul 2008 The SEC has belatedly staked a claim for a bigger role in US financial regulation. But the Federal Reserve, seemingly backed by the Treasury, looks more likely to get extra powers, including jurisdiction over investment banks. That looks like the right way to go.
Timing is crucial for financial sector rescuers 23 Jul 2008 Private investments in flailing financial firms seem to be picking up pace, and fundraising by outfits like Paulson & Co and Carlyle could hint at a shift in sentiment. But bankstyle leverage makes timing crucial. A mistimed call can wipe out an investment or miss the boat.
GE redeems itself with home run in the Gulf 22 Jul 2008 It may be flailing at home, but the US conglomerate has secured a sweet deal with Mubadala. It sends $4bn to Abu Dhabi for, potentially, $40bn of orders and a consistent buyer of its shares. The emirate also gets something more sustainable than a Formula One theme park.