Erin Griffith

Today the FDIC announced what we've known since last week- it held a little meeting with a motley crew of people who care about private equity investments in banks. Strangely, that group only included three private equity pros out of 20 attendees. The rest represented pension funds, private investors, investment managers, advisors, hedge fund managers and "others," all gathered to conduct the much-clamored about six-month review. The GPs include David Coulter of Warburg Pincus, Charles Davis of Stone Point Capital and Randal Quarles of Carlyle Group. The lack of GPs, or perhaps the lack of sympathy to their concerns, likely contributed to the failure to get any of the FDIC's stringent rules relaxed, at least so far. There could be a further announcement as to any policy changes, but the FDIC's press release today doesn't leave much room for optimism.

The Perks of Being a Goldman Kid: Michelle Leder discovers that children of Lloyd Blankfien , as well as the offspring of Goldman Sachs' general counsel and CFO, received substantial salaries and raises last year. (Dealbook) Retooling strategies: An alternative to alternative investments. (WSJ) Listicle: Top ten lies angels tell, a twist Guy Kawasaki's "Lies VCs Tell". (Social Tech) What If Women Ran Wall Street? On the old cliché-o-meter, this headline ranks up there with "What if God Was One of Us?" but I'm going to trust that New York managed to bring someone new to the table in that whole women-and-testosterone-and-risk-taking conversation. (NY Mag) Layoffs: Remember a year ago around this time, when an Allied Capital bankruptcy was on the table? The firm may have sold itself to Ares Capital but its still experiencing some dark times. The firm is eliminating 91 jobs in D.C. (Washington Biz Journal)

I recently spoke with Philip Canfield, a principal at GTCR, on M&A bullishness, GTCR's pipeline, why the fundraising market isn't so bad for everyone, GTCR's next fund equity checks on its recent deals, and the healthcare reform bill. What's your outlook for M&A in 2010? We think the year will be robust for M&A activity. It will be fueled by a few things. Number one: a rebound in valuations. A year ago all the buyers wanted to buy cheap, but no sellers were willing to sell. Now it's an environment where buyers think prices are reasonable and sellers agree and there's a crossroad to transact. Number two, you have a fair bit of liquidity in the market. On the financing side, starting early last summer you saw a big rebound in high yield markets. That has continued and led to a rebound in other credit markets, like the bank loan and CLO markets. The other component is that you have a trillion dollars of cash on the balance sheets of S&P 500 companies, and in private equity, you have half a trillion of committed but uncalled capital. That money starts going away by next year and is gone by 2013-- Can you clarify that? It expires. Most funds have a five year commitment period for new investments, and much of that half a trillion of committed, uncalled capital was raised in '06 and ‘07. So once you get out to 2014, that money will have to be invested or sent back to investors. There's a tremendous incentive for private equity firms to do deals.

Here are some potential target ideas, rumored or official, to jumpstart your deal pipeline. Our sources are various news reports and the Buyouts “Seeking Buyers” list. The Golden State Warriors basketball team said it is for sale. (Reuters) The FDIC is seeking buyers for three small Puerto Rican banks which need capital. The FDIC hired a bank to help is sell the assets. (WSJ) Novell Inc. has rejected a takeover offer from Elliott Associates LP. The company, an IT management software and Linux producer, will explore strategic alternatives on its own. Spark Networks, an online personals services company, retained Piper Jaffray & Co. to advice it on its strategic alternatives following an offer from Great Hill Partners.

Here’s a look at the last week’s worth of scoops, data, and analysis from the peHUB team. Catch up on what you missed before it goes behind our paywall… All First Reads | All Second Opinions Risk Is Part of The VC Game San Francisco Shindig Tickets Now On Sale Exclusive: CalSTRS Names Private Equity Investment Chief PE Community Helps Launch City Year London Apax Banks 4.5x on Tommy Hilfiger, Invests in PVH Again 5 Questions with Social Media Expert Rachel Polish M&A Monday What Dodd Bill Would Mean for Venture Capital and Private Equity

Goodbye, FlyOnTheWall: The stock rumor site Flyonthewall.com is no longer allowed to post news about analyst reports, a judge ruled. (Reuters) Lessons in Branding: Nestle, which has come under fire from environmentalists for its use of palm oil, has somewhat bungled its social media strategy by banning angry commenters from its Facebook page. That did nothing but fan the flames. (Ad Age) Here Comes Financial Reform. The Journal says “Finally.” (WSJ) Hugo Loss: Permira is willing to risk losing its commitments from Ohio pension funds over closing a Hugo Boss factory in Ohio. (LBOWire) Heidi Moore: The Big Short Gets the People Right and It Gets the Finance Right. (Slate) Can Palm Survive? The company received a brutal analyst report alongside yet another downgrade to “sell.” (Reuters)

Morgan Stanley predicts a huge increase in the demand for private credit. In a new report titled, “The Coming Rebound in Credit Demands,” the investment bank refers to the credit crunch as a “financial purging and healing.” Commentators haven’t shied away from the “binge” metaphor when discussing the 2007 boom-era, so I suppose there’s no harm in extending it to the credit crunch. With banks’ balance sheets de-levered and stimulus money in hand, the credit crunch is basically over, the report argues. And that means one thing: Time To Binge Again! According to Morgan Stanley, credit demands, which declined through the fourth quarter of 2010, will bounce back any time now. The report doesn’t directly address leveraged loans, but we know the issue of credit availability is certainly near and dear to the hearts of all general partners (whether they admit it or not). We’re already seeing increased credit demands from private equity with lenders meandering back to the table and deal volume picking up slightly.

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from the ratings agencies Standard & Poor's Ratings Services and Moody’s Investors Service. This week companies owned by GTCR, Silver Lake, TPG, and Oaktree Capital were downgraded. The debt on Berkshire Partners’ Bare Escentuals, which was recently acquired by Japanese personal care company Shiseido, was upgraded to ‘A’ to match its acquirer’s rating. Company: Graceway Pharmaceuticals Sponsor: GTCR Golder Rauner Action: Moody’s lowered the company’s corporate family rating to Caa3 from Caa1 and the probability of default rating to Caa3 from Caa1. S&P lowered the company’s corporate credit rating to 'B-' from 'B'. Highlight: From Moody’s: “Graceway's Caa3 corporate family rating reflects limited size and scale, significant product concentration risk, and high financial leverage relative to its anticipated earnings base.” From S&P: "The ratings on Graceway reflect the company's limited size, heavy reliance on one niche product, aggressive debt leverage, and looming debt maturities," said Standard & Poor's credit analyst Arthur Wong. These factors partly are offset by the company's currently adequate liquidity.

Jokes on the Newswire! "Chuck Norris Feeds His Vampire Squid $100 Bills: Mark Gilbert." Mark Gilbert of Bloomberg chimes in on the finance + Chuck Norris meme that was popular a year or so ago. (Bloomberg) Well Well: Women were better traders of stock during the financial crisis than men. (Daily Intel) Spotted: Warren Buffet doing an Axl Rose Imitation for a Geico power ballad. I don't know what else can be said about this, just watch it (below). (Brandfreak, EverythingWarrenBuffet, Time) Less debt, more charm: Private-equity managers face a difficult outlook (Economist) Wise Words: The Best Advice Bill Gross Ever Got. (MarketBeat) Recaps are Back, but Different: The recap in the age of austerity. (The Deal) Opinion: Arthur Delaney says the Dodd bill is soft on private equity and hedge funds. (HuffPo) Returns: Still bad, just, less bad for private equity. (The Globe) Fresh Capital: Yale has increased its allocation to private equity. (Reuters)

Remember when Calpers released the list of firms which did not voluntarily comply with their placement agent disclosure request? It was a bit scandalous because non-compliance carried the unfortunate connotation that there was something to hide. The list included eight private equity and venture capital firms, which we promptly called, only to learn that most of them had, in fact, complied. It's not clear where the mix-up occurred in every instance, but Calpers has announced that 100% of the firms are now in compliance and have submitted forms detailing their placement agent usage while securing commitments from the pension fund. So the following firms are officially vindicated: EnerTech Capital, Fenway Partners, GTCR, Information Technology Ventures, Markstone Capital, Pinnacle Ventures, Ripplewood and TSG Capital You can download their forms below.