Erin Griffith

Reporting live from Dow Jones' Private Equity Analyst Conference, I bring you, the PEA Highlight Reel. It's a list of my own overly grandiose, somewhat informative and mildly irreverent takeaways from the first day of the private equity world's Burning Man Festival. Enjoy after the jump...

AIG’s private equity businesses will likely top the list of divestiture candidates that posses “the least possible disruption to the overall economy.” Seems to me the businesses I described on Monday would be easier to extract and slide into another FoF or PE manager’s portfolio. It made sense pre-bail-out; now it seems beyond clear. Even […]

Volkert Doeksen, CEO and Managing Partner at AlpInvest Partners, doesn’t like the word “proprietary.” When asked what he perceives to be the greatest fault of GPs at today’s Private Equity Analyst conference, Doekson said, in fundraising, too many GPs try to emphasize their proprietary deal flow. Based in London, New York and Amsterdam, AlpInvest has more than 40 billion euros under management. The question was posed in a “Five Questions” rapid-fire style. Check out the other four below: Q: What’s private equity’s theme song? VD: Kenny Rodgers - The Gambler. It's got the lyrics ‘Know when to hold and know when to fold.’ What’s the one thing you would have have done differently over the last year? I would have sold my house in the Hamptons. What is the best thing about the current deal environment? Realism is Back. In some ways, our job will be easier, because

All the way back in 1998, AIG invested $150 million for a 7% stake in Blackstone Group. The stake was supposed to be valued at $1.35 billion over an undisclosed period of time. At the time of Blackstone’s IPO last year, that stake grew to nearly $2 billion, according to an AP report. Separately, AIG agreed to commit around $1.2 billion in various Blackstone funds. The point was to formalize AIG's relationship with the fund via former AIG CEO Hank Greenberg.* Now Greenburg has been ousted at AIG (replaced by a buyout pro no less), and anyways, the insurer may need to liquidate that stake. Ironically, the same 1998 press release that announced AIG’s investments in Blackstone also announced a termination of a longstanding LP relationship, triggered by a different financial crisis. Blackstone lost its commitment from Nikki Securities of Japan thanks to the tough market in Tokyo in the late 90s.

The Sky Is Falling Edition The Deal Professor: One of the few rational takes on the day’s events. Deal Professor offers a bittersweet list of lessons learned. Like John McCain, he agrees that “the sky is not falling” (see #7). FT: A slightly harsher take on the reason for black Sunday from FT's Avinash Persuad. Dealbook: Don’t rule out a Neuberger sale yet, kids. Bain, KKR, CD&R and Hellman & Friedman are all still in talks for the busted bank’s investment management division. Dealbook: Why old fashioned advisory suddenly looks appealing. Worth quoting, Teitelman writes: When we have the time to look back at the last decade or so, we may well see two new trends: the slow unseating of Wall Street investment banks at the hands of institutions with bank pedigrees and regulatory oversight; and the creation of a parallel universe of firms, many private -- some of whom, particularly the hedge funds -- were active in the speculative pressures that took Bear, Lehman and Merrill off the table. Dealscape: Wall Street’s woes extend to Jersey, too.

Dealbreaker this morning reported that Berkshire Hathaway/Warren Buffet could be interested in backstopping AIG. Then I got an unfounded tip suggesting that AIG had hired a law firm to advise it on filing for Chapter 11. (Just in case of a freak accident, Equity Private has laid out a discussion of the possibilities) But at last, the truth. At around 1pm, Governor Patterson agreed to let

FT: A detailed comparison of the current economic environment and the Japanese banking crisis. My favorite phrase is “great creativity of with the truth.” As a reporter, trying to figure out who is feeling the pain, it is sometimes very difficult to dig deeper than the “creative” answers financial types spin. New York Post: When your portfolio company goes bankrupt, watch out for crazy vendors with threatening emails. A Steve & Barry’s (backed by TA Associates) vendor writes that shoppers of the bargain retailer are buying clothes that are “soaking of blood and tears of worldwide vendors." Hello, Melodrama. New York Times: Hedge funds can now romanticize the good old days, because the good old days are now a thing of the past. Well that’s not exactly a newsflash, but there is one part of this “trend” story that interests me:

ZM Capital: a small investment subsidiary of ZelnickMedia that somehow managed to convince a $249 billion company with 91,000 employees to do its bidding. Three weeks ago, most everyone assumed that Quadrangle Group’s agreement to buy media services company Greenfield Online was a done deal. It had a standard go-shop provision, but conventional wisdom tells us those rarely go anywhere. And besides, Greenfield’s stock was trading at a relatively small spread. Business as usual. Ho-hum. Then, seemingly out of nowhere, Microsoft upended the whole thing with a superior offer that Quadrangle was unable to match. Who knew little ZM Capital was behind the scenes, plotting a rival bid, for almost a year?

Lehman Edition: Follow the jump for some non-Lehman reading. Business Week: So, there is nothing but Lehman Brothers coverage in the news, and you don’t need me to point you to it, but I wanted to draw attention to a specific piece of private-equity-focused analysis. Business Week asks, is it time for Lehman to go private? Dealbook responds with even more insightful commentary (and comments), including two cents from an analyst who believes Lehman’s management may be able to piece together enough money to buy the company. Wall Street Folly: In response to the Reuters and CNBC “debunk” that Goldman Sachs isn’t interested in buying Lehman Brothers, the blog asks: “Did anyone *really* think that Goldman would buy Lehman Brothers? Of course by now we all know the report and the blog are referring to a Goldman bailout of all of Lehman; all the hubbub over the piecemeal auction of its asset management businesses is long gone. Dealbreaker: Ok, last one, I promise. Best irreverent headline on the whole mess.

Linens ‘n Things could become the subject of a probe from a disgruntled bondholder, LBO Wire reported. Bondholder Levine Leitchtman Capital Partners is suspicious of Linens ‘n Things’ “quick demise” under the private equity ownership of Apollo Management. It’s true, Apollo only owned Linens around two and a half years before it went bankrupt. And it’s also true that there have been reports of strange management behavior at the company (but come on, it’s The Post…). Even so, this filing is significant for any PE firm facing a leveraged, unplanned disaster with potential for bankruptcy. The key word here is “unplanned.” If Levine Leitchtman’s probe is (a) granted and (b) fruitful, its bad news for private equity’s image and potentially, its deal flow. The probe follows a similar line of thinking as the Mervyns lawsuit from last week. (You might remember, bondholders accused its PE backers of basically sabotaging the company to make money on its real estate.)