investment dealers

Economy hitting portfolio companies of big private equity firms

Tue, 29 Apr 2008 06:59:58 -0400

As if private equity firms didn't have enough problems. Investment Dealers' Digest suggests that the rocky economy may be a problem for restaurant-chains, home furnishing companies and others whose fortunes are tied to the consumer economy. Linens Holding Co., owned by Apollo Global Management, recently asked its lenders for--and received--forbearance. Kohlberg Kravis Roberts' Sealy Corp., a maker of mattresses, may see problems as consumers restrain spending, the magazine notes. Moody's issued a negative outlook on the company, citing worsening economic conditions, among other things. Also, Sun Capital's Real Mex Restaurant chain was downgraded and hit with a negative outlook; it runs El Torito, Chevys Fresh Mex and Acapulco Mexican restaurants.

For more:
- here's the article from Investment Dealers' Digest (for FierceFinance readers)

Related Article:
Consumers could turn to bane of banks

Merrill Lynch bulks up in Brazil

Fri, 04 Apr 2008 07:59:54 -0400

Emerging markets have been bright spots for a lot of banks lately, one reason why Merrill Lynch is making a move into the field. The company's recent recruitment of nine investment bankers in Brazil is a good indicator of its ambitions in the region, notes Investment Dealers' Digest. Brazil may end up the key in its entire Latin American strategy, which includes presences in Panama, Chile, Argentina and Uruguay. It's already got plenty of competition in Brazil, with UBS and Credit Suisse leading the deal pack in 2008. Last year, Citigroup took to those honors. The big issue is whether Merrill made its move a bit too late. Most think business in the country will moderate.

For more:
- here's the Investment Dealers' Digest article

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Fund managers and emerging markets. SPOTLIGHT

Small deal market still thriving

Tue, 01 Apr 2008 07:59:54 -0400

The plunge in financial sponsor activity fortunately has not proven contagious for really small deal makers. While big and mid-market deals continue to fall, those worth less than $100 million continue to rise, notes Investment Dealers' Digest. These deals tend to be easier to close, as they are less dependent on high-yield type financing. Regional and small banks tend to be behind the financing. A lot of this is the sale of family businesses, it seems. This isn't enough to make a dent in the overall deal slowdown, but hey, a little good news is better than no good news at all.

For more:
- here's the article

Related Articles:
Another sign of a private equity bubble. Article
The future of small and mid-size banks. Article

Trend: More roll-ups of advisory firms?

Thu, 13 Mar 2008 07:59:57 -0400

Registered investment advisers have a pretty compelling pitch when it comes to graying clients. They aren't commission-based guys. They're thinking less about trades and more about your portfolio in its entirety. Of course, some of them take something like 200 basis points, which some would find even worse than cadging a few commissions here and there. In any case, there is demand for RIA service and several in the private equity industry are bent on creating nationwide firms by rolling up boutique advisory firms, notes Investment Dealers' Digest. While this is nothing new--recall the success of National Financial Partners--the trend seems to be gathering steam.

For more:
- here's the Investment Dealers' Digest article

Nasdaq out for more SPAC business

Tue, 04 Mar 2008 06:59:57 -0500

Blank check companies are all the rage. Investment Dealers' Digest notes that the likes of Bruce Wasserstein, Joseph Perella, Thomas Hicks, Nelson Peltz and Ronald Perelman all have formed blank check companies. And the list is likely to grow. SPACs accounted for 25 percent of IPOs in 2007. The American Stock Exchange has benefitted, listing 50 blank check companies. Some of them switch to the Nasdaq once they make a deal, but the Nasdaq, whose existing rules don't allow blank check companies without assets to trade, wants more IPO activity. To that end, it has proposed some rule changes.

For more:
- here's the article from Investment Dealers' Digest

Related Articles:
Blank check companies still hot. Article
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Can Egan-Jones make a difference?

Wed, 27 Feb 2008 06:59:56 -0500

The Securities and Exchange Commission has granted Haverford, PA-based Egan-Jones, status as a nationally recognized statistical rating organization (NRSRO). This basically means that it now is a credit rating agency on par with Moody's and Standard & Poor's. The firm comes to the table with a twist: Its business model is strikingly different in that it relies on an investor-paid approach, not an issuer-paid one, notes Investment Dealers' Digest. This addresses what many see as a huge flaw in the current system, the overt conflict of interest when issuers pay for their own ratings. We'll see if Egan-Jones can make a splash.

For more:
- Here's the Investment Dealers' Digest article

Related article:
Questions about upstart credit rating agency. Article

Who won and who lost in 2007?

Tue, 26 Feb 2008 06:59:56 -0500

At Goldman Sachs in 2007, employees on average made $661,490, including salary and bonus--a 6.4 percent increase from $621,793 in 2006--notes Investment Dealers' Digest. Bear Stearns employees on the other hand averaged $241,998 last year, a 24 percent decline, while Merrill Lynch employees averaged $196,479, way down from $234,004. Beyond that, it really depends on where you worked. Fixed-income group bonuses fell by as much as 30 percent, and if you were in CDOs, ABS, and structured finance in general, you probably were even worse off. Investment bankers and those in commodities fared much better.

For more:
- here's the Investment Dealers' Digest article

Related article:
Salary guide: Keep up with how much you are worth. Article

More investors investigate hedge fund managers

Fri, 22 Feb 2008 06:59:57 -0500

The hedge fund industry isn't the most transparent, leaving institutions in a bit of a pickle when it comes to due diligence. More people seem to be taking an aggressive approach, actually hiring investigators to take a close look. First Advantage Investigative Services has looked into more than 5,000 hedge managers. The biggest red flags that have popped up so far have been bankruptcy and involvement in civil suits. One manager was sued for not paying rent, which has to make you think twice. In the end, a clean past is not necessarily a guarantee of future success.

For more:
- here's an interview with Investment Dealers' Digest

Related articles:
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Fund managers turn risk averse. Article
Funds of hedge funds not faring that well. Article

Still room for small hedge funds

Thu, 14 Feb 2008 06:59:55 -0500

Launching a hedge fund in many ways is harder and easier than ever. The competition for funds is intense, and not everyone can get in the game. At the same time, there are host of near turnkey service providers that allow funds to get up and running quickly. As of the end of September 2007, 863 funds were launched, and 408 funds were liquidated, Investment Dealers' Digest notes. In 2006, 1,518 new funds were launched, while 717 were liquidated. The record was set in 2005: 2,073 launches and 848 liquidations. So there are still plenty of believers out there willing to start up. There are certainly advantages to being small. The ability to get in and out of positions is certainly one. In the end, numbers will tell the story.

For more:
- here's the Investment Dealers' Digest article

130/30 funds aim for institutions

Fri, 08 Feb 2008 06:59:56 -0500

We've noted that 130/30 funds seem to be all the rage right now. The industry seems to be betting big that these funds will continue to win over investors, especially big pensions. Investment Dealers' Digest notes the current size of the 130/30 market is about $50 billion. But some think that it will grow to $1 trillion over the next few years. For many hedge fund firms, winning 130/30 funds are their key to garnering more business from institutions. Pensions for now seem enamored. They like the short component, and reckon that a hedge fund is more adept at it than a long-only type. So to really win, a fund will have to generate some alpha from its short expertise. Long-only funds will have to adapt.

For more:
- here's the Investment Dealers' Digest article