Grabbing masters of the universe coattails doesn’t work 6 Mar 2008 Investors who bought into Blackstone, Carlyle, OchZiff or KKR shares hoping for some altasset pixie dust have been sorely disappointed. They shouldn t be shocked. The fund managers are masters of market timing. Why wouldn t they have sold out at the top?
Ambac’s bailout springs a leak 5 Mar 2008 It isn t being rescued by its bank clients, as shareholders hoped. News of its plan to raise $1.5bn in equity and converts sent its stock plummeting. Ambac admits the new capital won t eliminate the risk of a rating downgrade. Banks were wise not to increase their exposure.
ECB should look for US help with the dollar 5 Mar 2008 The strong euro now has Europe worried. The ECB s Trichet is likely to try to talk the single currency down on Thursday. What he would like is US help. A Fed purchase of dollars would take pressure off the euro. It would also counter some inflationary problems in the US.
Spacs shouldn’t be considered a bear market hedge 4 Mar 2008 Issuers say investors are snapping up shares of blank cheque IPOs even as they shun regular IPOs because there is little downside. But that s only true if the manager doesn t buy anything. If he does and he has every incentive to do so investors can easily lose out.
Exclusive: Brevan Howard to list new $500m fund 4 Mar 2008 The UK hedge fund is hoping to capitalise on the performance of BH Macro, its existing permanent capital vehicle, and growing investor appetite for listed funds. The timing looks smart providing investors aren t spooked by recent hedge fund blowups.
MBIA’s hothead CEOs don’t do it any favours 4 Mar 2008 Gary Dunton railed against allegedly unscrupulous short sellers and unfair ratings agencies. His successor, Jay Brown, has now taken up the cudgel. MBIA s shareholders might be better off if the bond insurer's bosses stopped slinging blame for its problems, and solved them.
Bulldog baits SEC on hedge fund advertising 3 Mar 2008 Fund manager Phil Goldstein thinks regulators are unfairly preventing US hedge funds from marketing their businesses, putting the funds in the same category as purveyors of pornography. Goldstein has embarrassed the SEC before, and has a case this time, too.
Carlyle up to old tricks with Sarko hire 3 Mar 2008 The US private equity firm insists it is hiring the French president s halfbrother purely for his investment banking expertise. But Carlyle has always understood the value of political connections it would be surprising if it didn t hope to use them.
Hedge funds race to defuse leverage time bomb 29 Feb 2008 Peloton was laid low partly by leverage that was too aggressive for its creditors. The LTCM debacle in 1998 had similar features. Hedge funds have so far avoided blowups on the scale of Wall Street s losses. But that could change if they fail to scale back borrowing.
Buyout shops rebalance reality and myth in valuations 29 Feb 2008 Alternative managers are set to revalue private holdings more often as public markets move. KKR s publicly listed fund just marked several assets down. Investors should welcome more information, but could also see more volatility. That might change how they view private equity.
Close’s failed auction looks bad news all round 29 Feb 2008 All four of the UK bank s bidders have walked away. That s grim for shareholders, who have lost out on a bid premium, and embarrassing for managers, who rejected an offer last year. Funding looks to have been the stumbling block which doesn't bode well for other bank deals.
Will Wilbur whip Warren in monoline war? 29 Feb 2008 Messrs Ross and Buffett are both pushing into the bond insurance business. Buffett s offer to reinsure monolines muni business at exorbitant rates only roiled Berkshire Assurance s rivals. Ross s investment in Assured Guaranty could be a more effective play for market share.
Peloton blow-up signals dark days ahead for hedge funds 29 Feb 2008 The UK hedge fund was scuppered by a bad trade, tougher bank financing terms and the leak of its rescue plan. Peloton is unlikely to be the only fund caught out this way. But if it s any consolation to investors, Peloton s partners have lost everything too.
Swiss and Luxembourg tax havens next in firing line 28 Feb 2008 After the scandal over little Liechtenstein, the two larger European countries will come under pressure to divulge more information about accounts. Both turn over information in cases of tax fraud, but not tax evasion. The distinction looks flimsy.
Citadel might go public – the Egyptian one 27 Feb 2008 Sorry, Ken Griffin. A $7bn Cairobased private equity group bearing the Citadel name may beat you to the markets with an IPO. That is, unless a big private equity rival looking for a regional presence in the Middle East doesn t preempt a public offering.
Will Bernanke fall off the tightrope? 27 Feb 2008 The Fed chairman s insistence that inflation is under control is increasingly at odds with reality. If reported inflation continues to rise, and leads to a buyer s strike in the longdated Treasury market, Bernanke would share the fate of G. William Miller.
Listed hedge funds may outshine private equity – for now 26 Feb 2008 Shareholders liked OchZiff's earnings, and sent the stock up more than 7%. That makes sense hedge funds should be able to profit from volatile conditions. Buyout firms depend more on bullish markets. So rare public examples like Blackstone may struggle to impress shareholders.
Hellman & Friedman keeps it simple, gets buyouts done 25 Feb 2008 The buyout house has announced two $1bnplus deals since the credit crunch began a better record than other top funds. The firm s formula is simple: not bingeing on oversized deals and doing deals alone. That seems to be helping in today s tougher times.
Who takes the bigger risk – Cerberus or its co-investors? 22 Feb 2008 The buyout firm now says it doesn t have huge stakes in Chrysler and GMAC. That would normally cheer its investors. But each deal required a huge gob of equity, and Cerberus asked its investors to double down. They might not be so pleased.
Credit spreads may be warning equities again 21 Feb 2008 Will anyone listen this time? Traders blame recordwide credit derivative index levels on technical issues tied to a glut of unwanted assets. That s probably part of it. But when credit and equity markets fell out of step last summer, equity eventually followed credit s stumble.