Citi’s push for Pandit would be a gamble 9 Apr 2007 True, hiring the former Morgan Stanley president would be a coup. And $600m could turn out to be a bargain for his firm s hedge fund. But Old Lane hasn t established a track record yet. And Pandit s arrival could stir up a messy tussle over who gets to run Citi next.
Citigroup buys well in Taiwan 9 Apr 2007 The US bank is spending $426m on Bank of Overseas Chinese, even though it's been losing money. But BOOC s losses are somewhat misleading. Adjust the bank s figures to account for tax losses and previous writeoffs and Citi may have got its hands on a good deal.
Aim debate ignores poor returns 5 Apr 2007 US critics of the London bourse say loose rules help it attract new listings. This misses the point. Aim's risk adjusted returns are poor. Over the past ten years, a savings account would have returned more than a bet on the FTSE Aim Index.
UK Plc needs better pension disclosure 5 Apr 2007 Sainsbury s ballooning pension deficit has wrongfooted its private equity suitors. The surprise helps nobody certainly not shareholders. One answer is fuller disclosure of key assumptions. But that won t address the biggest uncertainty the attitude of trustees.
FSA tries to walk listing standards’ tightrope 5 Apr 2007 The UK regulator doesn t want to lose its reputation as the investor s friend. But tight rules were costing London hedge fund listings. The twostandards plan wasn t working. Now it hopes that it can find a commercially acceptable rule but with some teeth.
Should Apollo’s LPs buy into the buyout shop? 5 Apr 2007 The riches other institutions could have reaped make it tempting. AIG s $150m Blackstone stake in 1998 could be worth billions in the IPO. But as Apollo s Leon Black has noted, returns are coming down as LBOs get bigger. It s hard to see AIGlike returns in future.
Will Queen’s Walk woes spread to Tetragon? 4 Apr 2007 Polygon will be hoping the IPO of its synthetic bank won t be derailed by problems with other structured credit funds like Queen's Walk. True, it s not raising much new money and it invests in a less risky asset class. But investors are faced with a number of similar issues.
Will fear or greed drive private equity IPOs? 4 Apr 2007 It could be the former. Fear, that is, of losing key talent to rivals who can offer publicly traded stakes to new hires. That gives Fortress and Blackstone a big leg up. Banks are using this worry to try to spur firms like Apollo and KKR to go public.
NYSE joins US financial exodus 4 Apr 2007 Europeans feared that transatlantic takeovers would enmesh their stock exchanges in constraining US regulation. They got it all backwards. The new NYSE Euronext will push Paris, not New York, for international listings. Regulatory arbitrage is far more important than patriotism.
Europe’s stock market lead over US could widen 3 Apr 2007 The Old Continent is now a nose ahead on one measure of total market capitalisation. The lead could soon become definitive. The logic is compelling. Europe has twice as many people and 25% higher total GDP than the US. And its equity culture has a long way to go.
Barclays’ subprime bargain reflects ongoing woes 3 Apr 2007 It slashed what it will pay for mortgage provider EquiFirst by twothirds, even though the unit comes with none of last year s toxic loans. But plummeting demand from CDOs for new mortgages has made it nearly impossible for these lenders to turn a profit.
Eurex credit debut shouldn’t spook dealers 3 Apr 2007 The exchange convinced only one major firm to support its new credit futures contract. But dealers don t need to freeze it out. When Wall Street s big products debut on exchanges, they typically capture only a fraction of the market s potential business.
Queen’s Walk investors must grin and bear it 3 Apr 2007 Investors in Cheyne Capital s listed structured credit fund have taken a battering, thanks to its exposure to UK and US subprime mortgages. Queen s Walk s woes highlight the major flaw in these funds: the difficulty of valuing CDO equity. But winding it up is not the answer.
Spanish market regulator walks the plank 2 Apr 2007 Manuel Conthe has resigned as president of CNMV after the watchdog's shambolic handling of the bid battle for Spain s Endesa. Spain desperately needs a truly independent watchdog. But don t bet on it happening in the near future.
Man Group’s brokerage arm worth more than $4bn 2 Apr 2007 Analysts are valuing the UK hedge fund s futures brokerage unit, MF Global, at 1820 times forward earnings. That looks conservative. MF Global deals in the more liquid and transparent onexchange market. And financial stocks currently enjoy fat premiums in the US.
Management buyouts shouldn’t have break-fees 2 Apr 2007 These deals are fraught enough with potential conflicts of interest. Outsiders shouldn t be deterred from placing bids. The buyout of freight company EGL is a good example of how breakup fees could potentially hurt shareholders.
Man Group finally spins off brokerage unit 30 Mar 2007 This overdue move by the UK hedge fund group was largely in the price, but the news helps gloss over a disappointing trading statement. Investors will be left with a fastgrowing focused asset management business one that could attract the interest of predators.
New world order keeps M&A business strong 30 Mar 2007 The $1.1tn first quarter wasn t quite a record, but it is a sign of a healthy and highly liquid global economy. Corporate chiefs are scrambling to keep up with globalisation. Cheap and readily available debt spurs them on. But the peak may be in sight.
No one really understands hedge funds 30 Mar 2007 A study by the Spectrem Group finds that investment in hedge funds is being held back because many people are baffled by what they do. They re not alone. In today s complex financial world many hedge funds are in effect blind pools.
What’s driving the LBO boom: management incentives 30 Mar 2007 That s the apparent consensus of Wall Street s finest legal and financial minds gathered at their annual wingding in New Orleans. While investors believe this, it s surprising to hear CEOs s greatest advocates admit this Hobbesian dynamic is at work in the aggregate.