DealZone

from Global Investing:

Lambs to the slaughter

The mood was not so much one of indignant fury but quiet disappointment in Founders Hall for the Candover AGM yesterday. 

A contrite and clearly uncomfortable chairman Gerry Grimstone took the stand – looking like a schoolboy caught with his hand in the biscuit tin, wishing he could be anywhere else. 

 

He said he had lain awake at night re-examining the decisions that have devastated the share price and brought the company to the brink of sale. And it was easy to believe him. 

 

Company founder Roger Brooke spoke from the floor of his personal hurt and sadness at the damage to the company’s reputation.

 

“I do find it odd that the board was not aware there was a financial crisis,” added his co-founder and past chairman Stephen Curran.  

First Reserve’s deal war-chest expands

oilFirst Reserve is sitting on another $9 billion of spending money for energy deals after finishing raising its latest buyout fund, Fund XII. The private equity giant, which specialises in energy investments, said the fund is the largest ever raised in the energy sector and exceeds its previous fund, Fund XI, which raised $7.8 billion in 2006. 

The fund appears to be lower than target, however. London-based private equity intelligence firm Preqin said in a recent report that the fund had a $12 billion target.

“Energy remains a large, dynamic and complex industry where change creates new, attractive investment opportunities,” said William Macaulay, Chief Executive Officer of First Reserve in the press release (below).

What about “Chooch” ?

Steven Rattner, the leader of the Obama administration’s auto task force, has surfaced in the investigation of a kickback scheme at New York state’s pension fund.

In March, Henry Morris, who was the fund-raiser for former comptroller Alan Hevesi, and David Loglisci, who was the state pension fund’s top investment officer, were charged with securities fraud, bribery, money laundering and other crimes in a 123-count indictment.

NY Attorney General Andrew Cuomo charged that Loglisci accepted sham “investments” for the production by his brother of a low-budget movie, “Chooch.” And for your viewing pleasure, peHUB’s Erin Griffith has tracked down the film’s trailer.

Pay-to-play funds scandal: Time for a change

primackDan Primack is the editor of peHUB, a Thomson Reuters publication.

The New York State Pension Fund kickback scandal is making new headlines. The Wall Street Journal reported that Steven Rattner, the head of the Obama administratino’s auto task force, was one of the executives involved with payments that are under scrutiny, citing a person familiar with the matter.

On Thursday, New York State Attorney General Andrew Cuomo filed a criminal complaint against Raymond Harding, former chair of New York’s Liberal Party, for scheming with the already-indicted David Loglisci and Hank Morris. Cuomo also coaxed a guilty plea and financial remuneration out of Barrett Wissman, a crooked former hedge fund manager.

All of this got me to thinking more about the issue of raising fund capital from public pension systems, a process that often is just begging to be corrupted. Inexperienced and smaller general partners (GPs) can have real difficulty getting in front of a pension system’s investment staff, because there is rarely a transparent or streamlined process.

Dow Chemical: Official Rainmakers’ Punching Bag

Poor Dow Chemical.

Not only did the company end up having to buy Rohm and Haas at basically the same steep price it agreed to last year, but it has also become the favorite target of lawyers, bankers and maybe even judges at the Tulane Corporate Law Institute, an annual gathering of top dealmakers.

Timothy Ingrassia, head of Goldman Sachs mergers and acquisitions business in the Americas struck the first blow on Thursday morning.

 ”You’ve already had Dow Chemical’s unique interpretation of the merger agreement. There was never a transaction that made Apollo look better,” Ingrassia said, referring to private equity firm Apollo’s previous efforts to get out of an agreement to buy Huntsman Corp. 

“The He-Man of the recession”

Children's character Postman Pat poses outside Buckingham Palace in central London

As anti-capitalists, environmentalists, anti-war campaigners and others protested in the City of London to mark what they dubbed “Financial Fools’ Day”, the lobby group for Britain’s much-maligned private equity industry spied an opportunity to contrast the mayhem with their own activities.

It’s hard to tell just how far the BVCA‘s metaphorical tongue was in its cheek with this OTT press release, prompted by the protests and the “pre-pack sale” of the owner to the rights of some British kids’ TV characters, including He-Man and Postman Pat (pictured).

Still they insisted it was not an April fool, even as they billed private equity a possible “He-Man of the recession”. With this kind of deft “brand repositioning”, surely it won’t be long before Britons warm to the buyout houses. Full release in all its glory below:

from Funds Hub:

Dog Days at Cerberus

HUNGARY/Embattled Cerberus Capital Management, a private-equity firm named for the mythological three-headed dog that guards the gates of Hades, has been overwhelmed by clients seeking to withdraw money from its $2 billion hedge fund, Cerberus Partners.

Website FINAlternatives said that fund investors representing 17 percent of the assets wanted to withdraw their money in December, the most recent month for which statistics are available. Now, with Cerberus's investments in Chrysler and GMAC going bad and unemployed investors needing to tap more funds, that figure may be heading higher.

Now, according to this Bloomberg report, Cerberus sent a letter to clients warning them that it could take "years" to meet all the redemption requests, which have stacked up since the firm imposed gates in December.

from Funds Hub:

Watch Pi Capital CEO David Giampaolo give his investment outlook

Giampaolo was speaking today at the London leg of the Reuters Hedge Fund and Private Equity Summit.

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from Funds Hub:

Watch hedge fund manager Colin McLean give his market outlook

McLean was speaking today at London leg of the Reuters Hedge Fund and Private Equity Summit.

from Left field:

Cubs bidder admits he is (horrors!) a White Sox fan

wrigley1John Canning Jr, who came up short last year in his bid for the storied Chicago Cubs baseball team, made a shocking admission on Tuesday.

The chairman of Chicago private equity firm Madison Dearborn Partners, speaking about his industry at a breakfast meeting, said he roots for the cross-town rival White Sox.

"The only thing that I was able to come out of the closet on was I'm actually a White Sox fan. God, what a relief not to buy the Cubs," he said as the audience of several hundred local executives laughed.