Will Asian entrepreneurs put profits over family? 16 Apr 2008 Not quite but generational transfers aren t the only route aging founders are taking with their businesses. The sale of Hong Kong s Wing Lung Bank is one such case. If this is more than a fluke, private equity and Asia s investment bankers have reason to cheer.
Subprime bust mints new hedge fund billionaires 16 Apr 2008 Many top investors profited last year from the subprime bust. John Paulson made $3.7bn while Harbinger Capital s Philip Falcone brought in $1.7bn, according to Alpha magazine. But some of the usual suspects missed the credit boom and bust and missed the list.
Paulson prods hedgies to look more like Goldman 15 Apr 2008 That s not a bad thing. The recommendations, from a US governmentsponsored group of fund managers, make sense. Many funds should improve disclosure, valuation and risk management. But even those at the vanguard will remain exposed to the risks that have roiled Wall Street.
WaMu deal looks like highway robbery 14 Apr 2008 Late Friday, the thrift slipped out the specifics of its plan to raise capital from TPG and a few privileged institutions. Among the details: nearly $2bn of freebies and fees coming at the expense of current owners and coercive mechanics to cram the deal down their throats.
Prodesse capital-raising hints at credit appetite 11 Apr 2008 Funds investing in US mortgages have had a torrid time during the credit crunch. But Londonlisted Prodesse has finally got away a £10m capitalraising postponed from last year. That could hint at returning confidence at least to the higher quality end of the credit markets.
For once, the IMF may really matter 11 Apr 2008 Finance ministers meeting in Washington to address the financial crisis are giving the IMF a new lease of life. But international consensus is notoriously hard to achieve and the authorities still trail behind events.
Wall Street firms pick different exits from LBO loans 10 Apr 2008 Citi is financing a sale of $12bn of its loans, sparing it the likeliest losses but not all the worstcase exposure. Lehman, by contrast, is hanging onto first loss risk on $3bn of its portfolio but sharply cutting its maximum loss. Goldman is just selling. Why the differences?
Gordian Knot’s SIV starting to look frayed 10 Apr 2008 Downgrades to the fund group s Sigma Finance SIV come as the vehicle is about to refinance half its debt. Sigma has lowish leverage and decent assets on its side, and still has an investment grade rating. But $20bn is a lot to refinance in these markets.
Socially responsible LBO doesn’t have to be an oxymoron 10 Apr 2008 Buyout firms need some image help. They probably won t tone down leverage or costcutting. But they could still collect some kudos by setting up socially responsible funds. A New York pension fund dedicated $500m to green investments. So there could be money to be made, too.
Vulture funds face slimmer pickings 10 Apr 2008 Investors have ploughed over $200bn into distressed debt funds. Now, with defaults rising, it looks like their time has finally come. But debt market innovations during the credit boom could make vulture fund managers jobs harder.
Apollo forces itself into harsh public market 9 Apr 2008 Leon Black agreed to a deadline for going public when he listed on Goldman s private exchange last summer. That might have seemed a smart way to entice investors. But now Apollo must wade into an unfriendly public market. And it will lose the advantage of limited disclosure.
Hedge funds pick good time to ratchet up PR effort 9 Apr 2008 Different industry groups have been busy banding together. With talk of tighter financial regulation on everyone s lips, hedge funds are easy targets for lawmakers. But they re looking relatively blameless for the credit crunch, so it could be a good time for a charm offensive.
Sunshine could help regulate Wall Street 8 Apr 2008 Forcing investment banks to disgorge more information could help stop them running excessive risks. They d know that smart market operators could use such information to trade against them and would therefore be more conservative in the first place.
Fed should wean Wall Street off its funding 8 Apr 2008 High yield markets rallied and interbank lending thawed slightly in the past week. But banks and brokerages are still elbowing for a place at the Federal Reserve s punch bowl. With its resources shrinking, the central bank should consider when to wind up the party.
Mid-market buyout binge may yield slim pickings 8 Apr 2008 Midmarket buyout firm Advent has just raised a $10bn fund, one of the biggest for deals of any size. With the market for megadeals stalled, investors are pinning their hopes on this smaller pocket. But more competition and less debt could make high returns hard to duplicate.
Semerci hops back on the gravy train 7 Apr 2008 The exMerrill man may have helped lose his old employer an eyewatering $27bn, but that s proved no bar to a new job running a London hedge fund. Semerci is living proof of Keynes s dictum, that in finance, it doesn t matter if you fail, so long as you fail conventionally.
Could Discover follow Diners Club’s path? 7 Apr 2008 The credit card company is buying Diners Club, the passé pioneer of corporate credit cards. The goal is to expand its footprint outside the US. But Diners Club's storied past and fall from grace may also foreshadow Discover s future.
Lehman borrows tarnished structure to offload hung loans 4 Apr 2008 The firm s Freedom CLO uses the same technology that ignited the buyout debt boom. But now, it s being used to clean up the rubble. It may limit Lehman s losses and, if defaults in the portfolio are modest, it could give the firm a windfall.
Hedge fund woes will get worse 3 Apr 2008 Polygon, Plexus and Russell are the latest hedge funds to suffer mass redemptions but they won t be the last. Runs on funds are a rational response to poor performance, illiquidity, investor risk aversion and a fear of being last out the door. There will be more casualties.
Stock picking may come back in fashion 3 Apr 2008 In a panicstricken market, there's little to be gained by looking at the fundamentals. But correlations among individual stocks appear to be falling from their peak levels. That's hardly a cure for the market's woes, but it's good news for stock pickers.