texas pacific group

Forbes rich list reflects alternative investments

Tue, 25 Sep 2007 06:59:55 -0400

Bill Gates still rules the roost, with Warren Buffett in second. But Forbes' new list of the richest Americans is chock full of newbies, many of whom made their fortunes in private equity or hedge funds. Financial News Online notes that David Bonderman and James Coulter, co-founders of TPG (Texas Pacific Group) made it for the first time. Three founders of the Carlyle Group also made it. Two other faring well: Steven Schwarzman, flush after the IPO of Blackstone, ranks 40th. Steven Cohen, of hedge fund SAC group, ranked just seven spots back. In the upstart category: 33-year-old John Arnold, a former Enron trader who founded his own hedge fund and is now worth $1.5 billion. The list will likely be a lot more volatile given the fortunes that are easily made and lost in financial services these days. These guys care about the rankings more than they let on. More than any league table.

For more:
- here's the article from Financial News Online

Is the TXU deal in trouble now?

Thu, 26 Jul 2007 06:59:58 -0400

Kohlberg Kravis Roberts has taken some hits as of late, as have all financial sponsors. One more thing for it and Texas Pacific Group to worry about: The TXU deal. It has been out of the news a bit, given other events, but the opposition has never really gone away. A new critics has emerged in the form of mutual fund company Franklin Resources, which owns a 5 percent stake in TXU, according to a filing. The Financial Times has indicated that it thinks the current $45 billion offer is "significantly below" TXU's current value. A crucial shareholder looms early next month. Of course even if all the critics can be placated somehow, there is still the tricky issue of financing. It would need to raise more than $35 billion. Which is going to be hard, if not impossible in the short term. Stay tuned.

For more:
- here's the Financial Times item

The thickest glass ceiling on Wall Street

Wed, 18 Apr 2007 20:01:34 -0400

In its inaugural issue, Portfolio magazine devotes an article to women in the private equity business. It notes that the industry can lay claim to a dubious distinction: "Some of the thickest glass ceilings in all of finance." They look even worse now that top Wall Street banks are starting to make strides toward correcting their long-time imbalances. There are, however, some success stories. The likes of Karen Bechtel and Sandra Horbach, of the Carlyle Group; Carrie Wheeler, of Texas Pacific Group; Jacqueline Reses, of Apax Partners; Melina Higgins, of Goldman Sachs; and Bodil Arlander, of Bear Stearns. Some would call them pioneers. Of course there are several top firms that have no women in partnership or power roles. Hopefully, that will change soon.

For more:
- here's the article from Portfolio
- more private equity news

...Other PE firms trail KKR by widening margin

Tue, 03 Apr 2007 20:01:35 -0400

There was a brief moment, not too long ago, when people thought Stephen Schwarzman, and the Blackstone Group, had eclipsed Henry Kravis and Kohlberg Kravis Roberts. Fortune had just named Schwarzman the King of Wall Street and there was a sense of transition on the air. Oh, c'mon! Who are we kidding here. KKR still rules the roost. The latest numbers show that KKR has racked up more than $100 billion in deals in the first quarter alone. Texas Pacific group comes in No. 2 with about $50 billion. Now, it's true that the TXU deal may end up really vexing the firm, but there is no way that KKR is not on top. The firms will be creating ever larger funds and looks to be around a while. That said, Blackstone's IPO will be a watershed. I would love to know what KKR thinks of all this.

For more:
- here's the AP article

ALSO NOTED: Schwab to pay $12 million to departing U.S. Trust exec; Lehman seeks more stock for compensation; and much more...

Sun, 01 Apr 2007 20:01:30 -0400

Company News:
> Texas Pacific Group has eye on Spanish airline. Article
> H&R Block still shopping subprime unit. Article
> Man to spin off brokerage unit. Article
> Lehman seeks more stock for compensation. Article
> Schwab to pay $12 million to departing U.S. Trust exec. Article

Industry News:
> Secret of high returns. Article
> Why foreign executives eschew sports jargon. Article

And Finally... More Donald Trump vs. Vince McMahon on WrestleMania. Article

Perhaps the carry will not be taxed after all

Thu, 29 Mar 2007 20:01:38 -0400

We've noted recently that there is a movement afoot in Washington that would tax the "carry," or the 20 percent chunk of gains, that has proven so profitable for private equity firms. Senator Charles Grassley has called for the carry to be taxed as ordinary income rather than as long-term capital gains. Ouch! But there are reasons to think the change may never happen. Carry arrangements are common also in real estate partnerships and hedge funds as well. A law that targeted only private equity firms may be tricky to craft. Also, if the law were to apply to other industries, the outcry would increase. You have to think that the well-heeled Private Equity Council, whose members include Blackstone, KKR and Texas Pacific Group, will not just take this.

For more:
- here's a CNNMoney.com article

Benefits of private equity firm IPO are clear

Tue, 20 Mar 2007 20:01:37 -0400

When you think about it, it makes a lot of sense for private equity executives to rail against Sarbanes-Oxley and at the same time consider a public offering. True, they will have some compliance headaches that they do not currently have. But the benefits are just too awesome. All alternative investment funds would like a stable source of long-term capital without the onerous restrictions imposed by institutional investors. Also, they may certainly benefit from another currency with which to expand. This is also a great way to reward your managers. So people are pretty much convinced that the Blackstone Group is onto something. Others that might follow suit include all the big names: Bain Capital, Carlyle Group, KKR, Texas Pacific Group and Thomas H. Lee Partners.

For more:
- here's a MarketWatch column

Could it really happen: Bidding war for TXU?

Mon, 19 Mar 2007 20:01:36 -0400

The media has been brimming with reports that The Blackstone Group and the Carlyle Group have moved closer to launching a bid for TXU. The hot rumor a while back was that each group was taking a look. Now it looks like they may team up. This of course sets the stage for a heavyweight battle of the stars. This would be every bit as big as Tiger vs. Phil. Would Blackstone and Carlyle, along with Hellman & Friedman, have a chance against Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs? It would be a lot of fun. It might also allay the fears of regulators, who have been very concerned about club deals. The word is that a bid might top $70, with Merrill Lynch, which is advising the group, kicking in some equity. A good old fashioned bidding war is exactly what the industry needs right now.

For more:
- here's a Financial Times article

Environmental group hires bankers

Wed, 07 Mar 2007 19:01:38 -0500

This is truly the heyday of investment banking. When environmental groups start hiring investment bankers, well, the world has shifted. Environmental Defense, a well known environmental activist group, has retained Perella Weinberg Partners to advise it on the TXU deal. Environmental Defense helped negotiate the much-publicized environmental terms of the deal that allowed Texas Pacific Group, Kohlberg Kravis Roberts and Goldman Sachs to buy the utility. Environmental Defense apparently wants a seat at the table as the negotiations continue. There has been some criticism of the terms. The move may signal a more prominent role for activists in future deals. Perella Weinberg is likely doing this pro bono (or close to it). Seems like good marketing.

For more:
- here's the New York Times article
Also: Texas faces an energy shortage. Article

Battle for Home Depot taking shape?

Thu, 01 Mar 2007 19:01:37 -0500

Nothing would get Wall Street's juices flowing like a good old-fashioned buyout battle. People are still wondering whether the Blackstone Group will take on KKR and Texas Pacific for TXU. If it did, it would make for some odd partnerships--odd for anywhere except the clubby private equity world. Home Depot just might auction itself, and the list of interested sponsors include the following: a team that includes Bain Capital, Carlyle and Clayton Dubilier & Rice; a team of Thomas H. Lee Partners, Goldman Sachs and the CCMP and a third that includes the Blackstone Group, KKR, Leonard Green Partners and Texas Pacific Group. So there you have it. The two preeminent firms could both be partners and competitive bidders. This makes the anti-trust case that much more complicated.

For more:
- here's the Financial Times article