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.
Subprime mortgage index bets are a crapshoot 2 Mar 2007 Deutsche Bank s $250m windfall from shorting a mortgage benchmark made reaping a profit look easy. And subprime prospects remain grim. But the index doesn t reflect reality. It s pushed around by onesided trades. That will make it hard to cash out of winning positions.
Help wanted: Equity bridge syndicate chief 2 Mar 2007 A top investment bank is looking for a senior executive to start a new business selling slices of LBO deals to investors ASAP. The ideal candidate has contacts at hedge funds, pension firms and institutions. Pay is unknown. Risks are high. Job stability is nil.
It’s time for investors to play safe 1 Mar 2007 As Greenspan inimitably observes, risk is no longer perceived as a major risk. But that could change when the business cycle turns. At that point, stocks with higher quality earnings should outperform smallcaps and other risk assets.
London hedge funds should consider Jersey 1 Mar 2007 The Channel Island tax haven is making a big push for hedge funds to relocate with a tempting package of low corporate taxes. Shrewd Londonbased funds will be tempted. After all, if you re based in a nice place, your employees are less likely to run away.
Commerzbank tries to end disastrous Jupiter saga 1 Mar 2007 The German bank valued the UK fund manager at £2bn in 2000, but will be lucky to sell it for £700m now. That s a 65% loss. Commerz couldn t hold onto Jupiter s star manager, John Duffield. He left to form a rival which now has a £1.3bn market cap.
What exactly should buyout houses disclose? 1 Mar 2007 Blackstone s Schwarzman, Carlyle s Rubenstein, and Permira s Buffini all agree: private equity needs to be more transparent. Now they ll have to clarify what they are prepared to make public. Here are some ideas.
Will history repeat itself in credit markets? 28 Feb 2007 If the pattern set since 1920 still holds, then the credit cycle should turn in 2007. Moody s expects history to be a reliable indicator. But this time could be different. There seems to have been a Great Moderation in economic cycles. The turn may be delayed and very soft.
JP Morgan Chase times Pakistan badly 27 Feb 2007 The bank missed out by exiting the Pakistan brokerage business in 2001. The stock market is up sevenfold since then. But it might be coming back too late. Pakistan has problems with corruption and terrorism. And the stock market is expensive.
Stock markets panic in unison 27 Feb 2007 It s globalisation at work. A 9% drop in overheated Shanghai went round the world in hours. Calm bond markets are reassuring. The sharp fall in share prices is probably just the result of adjustments in global trading books.
Another debt bomb drops on investors 26 Feb 2007 Credit Suisse is launching an exotically named synthetic CFO. That s not a finance director constructed of plastic and fibre. Rather, it s a fundoffunds leveraged up four times. Backtested, the equity tranche returns 30% a year. Looking forward is another matter.
Atticus rattles the Deutsche Boerse piggy bank 23 Feb 2007 This should enable the Germans to gear up and buy back stock. It might also lead to pressure for a breakup of Deutsche Boerse itself. The hedge fund isn't impressed with the capital the Germans are handing back. It's suggesting Deutsche Boerse separate its settlement unit.
Myners wary of pension funds’ love of private equity 22 Feb 2007 That may seem to contradict Myners' governmentcommissioned report on pensions in 2001, which accused UK funds of ignoring private equity. But it's unfair to accuse Myners of flipflopping. Six years ago he worried about herding by pension trustees. That's still a worry today.