LBO shops still have the whip hand over bond investors 19 Mar 2007 US bond investors are howling after discovering some poison puts safeguards against LBOrelated losses are not that toxic. In the tugofwar between debt investors and LBO shops, the former will only prevail if there is enough hemlock in the chalice.
Blackstone to show the benefits of going public 16 Mar 2007 The buyout giant is considering an IPO. Yet boss Steve Schwarzman s pitch is that life is sweeter free of the myopia of public shareholders. But there s one advantage to the public markets. They allow entrepreneurs like Schwarzman to cash out of their creations during boom times.
Could subprime meltdown derail LBO boom? 16 Mar 2007 Carlyle s boss points to several factors that could trigger the end of the private equity bonanza, from a terrorist attack to rate hikes. One missing from his list is the subprime debacle. Problems with mortgage loans could well affect investor appetite for buyout debt.
Why trade unions are wrong about private equity 16 Mar 2007 Trade unions are gathering in Paris today to vent their spleen about private equity. As usual in matters of economics, they miss the point. They would do far better to ask what has gone wrong with public companies and what can be done about it. They may not like the answer.
ICE’s $10bn bid offers more than money 15 Mar 2007 A better price isn t the only thing the electronic exchange s bid for the CBOT has going for it. Its deal offers fewer antitrust worries. And merging with ICE would give CBOT owners more control. To offset this, the CME will have to pay up.
Pru comes up with shrewd UK restructuring plan 15 Mar 2007 The UK insurer has eschewed the year zero solution of selling the UK business, partly because it wouldn t have got a good price. But the moves it s making should enhance value, while leaving all options open. That said, after past screwups, good execution will be key.
L&G raises investors’ hopes for capital return 14 Mar 2007 The insurer has two reasons to cheer. It grew profits and new business fast last year and dug out excess capital at the same time. That will raise investors expectations of a rich payout when L&G puts a figure on the capital it plans to return later this year.
Alternative assets fail investors 12 Mar 2007 Hedge funds, commodities and real estate are supposed to protect portfolios against stock market downturns. But the recent market jitters show they aren t meeting that promise. Government bonds and cash are better diversifiers.
SEC official joins US chorus of Aim-bashing 9 Mar 2007 London's smaller growth market really gets up the nose of US officials. Roel Campos is echoing similar comments from NYSE's boss John Thain. But instead of lashing out at Aim as a regulatory black hole, they should consider why smaller US companies increasingly list abroad.
Brevan Howard: the lesson for hedge funds 9 Mar 2007 For the UK hedge fund manager to have fallen so far short of its E1.5bn target for its new listed fund was a real setback for its ambitions. Other hedge fund managers may now be discouraged from going down this path. But they shouldn t, providing they follow these three lessons.
3i infrastructure fund limps over the line 8 Mar 2007 This is the second permanent capital fund in two days to fall short. The UK private equity group has raised just £700m of its £1.3bn target. 3i s fund always looked ambitious. But the wider problem is these structures offer more to asset managers than institutional investors.
D.Boerse pair leave over decentralisation plans 8 Mar 2007 The departure of the executives come as the exchange is under pressure from US hedge fund Atticus to separate out its settlement unit. It's not clear if DB's plans include such a move, allowing the exchange to return cash. But the exit of two dissidents will raise hopes.
Express pulls unique tactic in Caremark battle 8 Mar 2007 Rival CVS has argued Express Scripts $26bn bid for benefits manager Caremark has a fatal flaw: it wouldn t close until year s end. Express has turned this argument on its head by offering to pay for each additional day it takes for the deal to close.
AHL slump highlights problem with managed futures 7 Mar 2007 There s been a bloodbath among funds such as Man Group s AHL. But you expect that kind of volatility among funds that simply follow trends. The real worry is that these trades have become oldfashioned and overcrowded so you get a lot less upside despite your bumpy ride.
Thompson exit makes Resolution sale more likely 7 Mar 2007 It was always hard to see how the insurance investor's CEO would rub along with founder and chairman, Clive Cowdery. But why the split? Egos may have played a part. But it may also be that Cowdery, who has a large stake, was keener to sell the group than his chief executive.
The price of fear on Wall Street: $40bn 7 Mar 2007 That s the combined value wiped off the top five US brokerage firms recently. That s more than subprime mortgage woes warrant. In fact, financial markets would have to take a much broader pummelling for shareholders fears to come true.
Not all leveraged recaps are evil 7 Mar 2007 Paying giant debtfinanced dividends is a timehonoured way for struggling managers at public companies to repel buyout shops advances. But not all of these transactions destroy value. A new doityourself LBO by Dean Foods shows how they can benefit shareholders.
Wanted urgently: safe havens 5 Mar 2007 Investors unnerved by stock market falls might want to fly to safety. But that's not easy in a financially unbalanced world. Bonds are at risk from inflation, the dollar could drop sharply any time, and credit quality is set to fall. Inflationlinked debt, anyone?
Buyout shops can dodge bond meltdown temporarily 5 Mar 2007 The sharp widening in highyield bond spreads last week caught some buyout financiers off guard. Univision, in particular, had to pay more. But LBOs aren t dependent on bonds any more. Buyout shops raise most of their debt in the loan market. It too will slide, but more slowly.
Fear is biggest threat to markets 2 Mar 2007 Investors do have a few new reasons to derisk their portfolios: a weakening US mortgage market and a slightly more expensive carry trade. But this week s tumble springs mainly from a loss of confidence. That need not be dangerous, as long as doubt does not turn into distress.