Dan Primack

Bertram Capital last month began raising its second fund with a $500 million target, peHUB has learned. The Silicon Valley-based growth equity firm originally planned to begin marketing in early 2009, but deferred due to smaller deal sizes. “Everything we’re buying right now is substantially under 5x EBITDA, but we originally forecasted paying 8x EBITDA or more," Bertram managing director Jeff Drazen explained at the time. "[Canadian publisher] Trafford is a good example. It’s a $10 million business we’re buying for a couple hundred thousand… I just don’t feel we can go out until Fund I is 75% committed, and we’re just not there yet.”

You've got to love Jon Moulton, the UK buyout pro who quit Alchemy Capital last year to launch a new shop called Better Capital. Well, maybe not if you're the Alchemy partner he flogged for being unfit to lead the firm, but certainly if you're a blogger who relishes such conflict being brought out into the open. Anyway, Moulton has now lobbed a tongue-in-cheek grenade at the entire private equity industry, via an A-Z glossary on the Better Capital website. Here are a few highlights: C: Carried interest. The percentage of the profit on a transaction that goes to the partners of the PE firm. Known as 'carry' as in 'too much money to carry'. E: Envy ratio. The ratio between how much money a management team makes and how many workers they make unemployed. Also: Exit. The only door a VC can see. S: Ski trip. Winter activity for many megafund personnel. Moulton also doesn't spare his former firm, with "A" standing for:

Ten days ago, private equity firm Quadrangle Group was in the news for all the wrong reasons. It was sued by the SEC for its alleged role in a pay-to-play pension scheme in New York, and then settled for $5 million. It also settled with New York for another $7 million, and threw in a public statement about how firm co-founder Steve Rattner's actions were "wrong, inappriate and unethical." Quadrangle had been hoping to settle for quite some time, in order to put the ugliness behind it and refocus on making new investments and selling old ones. And it would appear to be mission accomplished, as the firm today announced an agreement to sell portfolio company Protection One (Nasdaq: PONE) to GTCR for approximately $828 million, via a tender offer.

I'm a veteran of hundreds of private equity panels. And I've edited hundreds of blog posts authored by industry insiders. Both are flush with unflattering anecdotes, but very rarely is the subject identified. Instead, it's a lot of: "There was this guy..." or "We once invested in a company..." But there are exceptions to every rule, as evidenced by a recently email newsletter from executive recruiter Pinnacle Group (and sent to me by multiple readers). The author, Pinnacle managing director Joe Logan, writes about the increased value -- and declining examples -- of trust in business relationships. And then comes this: So, imagine my surprise when I learned that Thomas Vo, a candidate who accepted an offer from one of our clients in February, announced this week that he was reneging on his acceptance. According to Thomas, although he had signed an agreement accepting our client's offer and agreed to a start date for this summer, he was contacted "out of the blue" by the HR department at a PE firm he declined to name (not surprising) after accepting an offer with our client and, although he tells us "he wasn't looking", he continued on interviews with this unnamed PE firm and has now accepted an offer with them – leaving our client in the lurch, months after they thought they had concluded their search. To be clear, I have no idea who Thomas Vo is. I've done some Google and LinkedIn searching, but so far have come up empty. I asked Logan where Vo was going, but apparently

Lots of press coverage today of Raj Gupta, an independent Goldman Sachs director who reportedly agreed to step down after learning that the Feds had intercepted phone calls implicating him in the Galleon insider trading case. What the stories neglect to mention, however, is that Gupta currently helps run an India-focused private equity firm called New Silk Route. Moreover, he's not the only New Silk Route pro who knows his way around an insider trading investigation.

After over a month of protests and on-again/off-again negotiations, Hugo Boss and workers at its Brooklyn, Ohio-based suit-making plant have reached an agreement that will keep the facility in business. No specifics have yet been disclosed about the new labor contract, which was ratified this morning. To be honest, this is more than a bit shocking. When I first began covering this story last month, sources close to Hugo Boss said that the shutdown decision was final and would not be revisited. The Brooklyn, Ohio shop was profitable, they acknowledged, but not competitive in either the short or long-term (Hugo Boss does not have any other apparel factories in the U.S.). Moreover, Hugo Boss majority shareholder Permira said it would not intervene in operational decisions, despite vocal opposition to the shutdown by a number of public pension funds that serve as Permira limited partners.

Private equity was borne of Wall Street, but their relationship now is under regulatory attack. As we’ve discussed before, Chris Dodd's financial reform bill would prohibit banks from investing either directly or indirectly on the equity side of private equity deals (via the so-called Volcker Rule). Moreover, proposed Basel III language would make PE fund commitments difficult for any G20 bank, given the capital holding requirements for unfunded commitments. Private equity’s response to all of this has been a claim of systemic impotence: “Hey, we didn’t cause the financial meltdown.” And, to be fair, it’s a legitimate defense. Relatively few big buyouts have gone bust, and many deals (and funds) on life support last year are now breathing on their own. Moreover, most systemic risk posed by private equity relates to poorly-priced leveraged loans – a side of the business that no proposed legislation looks to curb. So let’s stipulate that the proposed rules to “break up” Wall Street’s bonds with private equity are unnecessary from the point-of-view of future economic cataclysm. Instead, let’s look at a deeper question: Will such regulations save the banks from themselves?

The SEC today filed civil fraud charges against Onyx Capital Advisors, accusing the Detroit-based private equity firm of bilking three public pension funds out of more than $23 million. Also charged was Onyx founder Roy Dixon and his pal Mike Farr, a local auto dealer who once played wide receiver for the Detroit Lions. The prosecutorial […]

AXA Private Equity today announced that it has acquired a $1.9 billion portfolio of limited partner positions from Bank of America. It's the largest disclosed secondary transaction since CalPERS sold a legacy portfolio at the end of 2007 for $2.1 billion, and perhaps an indication that buyers and sellers are finally bridging their long-standing price gap. My snap verdict is that this is a win-win for both AXA and BoA. No one is disclosing pricing terms, but one can assume that AXA paid less than it would have were BoA to have opened the process to competitive bidding [Update: A source tells me that BoA did run a competitive, self-managed process, with two or three firms involved]. Moreover, continued economic recovery should help the portfolio increase in value over time (remember, people thought Lexington Partners paid too much for that $1 billion Chase portfolio back in 2000, and that worked out just fine for Lex).

Remember all that talk about limited partner defaults, whereby private equity firms would make capital calls that their illiquid investors couldn't cover? And then how it didn't seem to happen? Well, perhaps news of no LP defaults was exaggerated. peHUB has learned that Granite Hall Partners, a Chicago-based fund-of-funds, defaulted on a $15 million commitment to TPG Capital in the middle of last year. The commitment was for TPG's sixth mega-buyout fund, and was made just before TPG plugged around $2 billion into Washington Mutual. At the time, Granite Hall was seeking to raise around $150 million for its third fund-of-funds. Its prior two vehicles had been capped at just over $60 million, with most of the money coming from high-net-worth individuals. The third fund-of-fund instead was designed to entice institutional investors, although the