Erin Griffith

Mega-buyout firm Apollo Management has a lesser known BDC outfit called Apollo Investment Corp. (Nasdaq: AINV), which invests in CLOs, sub debt, second lien bank debt and warrants of leveraged buyouts. But the interesting part of Apollo Investment is its co-investments. The firm makes equity investments alongside a number of well-known private equity firms. Because the firm is public, its quarterly report includes a number of not-otherwise disclosed write-downs and write-ups on portfolio companies of firms like GTCR Golder Rauner, Code Hennessy, Wasserstein & Co. and Madison Dearborn Partners. UPDATE: The mark-to-market values which the firm holds its companies at are provided by independent third parties, not the general partners or Apollo itself, a representative for the firm said. Follow the jump to view the second quarter write-downs and write-ups on the 23 LBOs in which AINV has co-invested:

The big PE news today was obviously the FDIC and private equity's investments in failed banks. You can find our coverage of that here. Fortune's Take on it: Regulators cleaning up after bank failures showed Wednesday how far they're willing to reach out for help. (Fortune) How to Give a Lousy Presentation: Fifteen ways to make a bad impression. Some of these are totally obvious, but number 11 or 9 always seem to get overlooked. (BusinessWeek) Big Questions: What good does private equity do? (My answer: They create value, duh.) (Economist) Results: NB Private Equity earnings rose this quarter. (WSJ) PE Interview: "The era of highly leveraged, high-priced private equity deals is being replaced in Germany by smaller acquisitions focused on long-term growth," according to Lewin Berner. (WSJ)

Naturally the private equity council watched today's FDIC board meeting (see earlier) with great interest--many of its members have already made bank investments, which may not necessarily be exempt from the new investing rules. The PEC, which represents the 11 largest buyout firms in the US, issued a statement today which expresses continued criticism of the 10% capital requirements for banks under the ownership of private equity firms. The FDIC lowered this requirement from its initial proposal of 15%. The PEC was so critical, in fact, that it pulled out private equity's secret pity weapon, reserved only for the direst of situations--the old "We are do-gooders, we invest public pension money" trick. The FDIC wouldn't really want to impose such harsh requirements on the money managers of retired firefighters and teachers, would it? Well, maybe that wasn't the exact wording. The PEC did express appreciation of the FDIC's six-month review period for the rules. A lot can happen in six months, and perhaps the FDIC will loosen its requirements even more at that time. You can read the PEC's official statement below.

After passing its revised policy for private equity investment in failed banks this afternoon with a four to one vote, the FDIC has released its full statement on the official policy. You can browse all 39 pages of it below. Here's the summary from the press release: The FDIC Board today adopted a final Statement of Policy on the Acquisition of Failed Insured Depository Institutions. This policy statement provides guidance to investors interested in acquiring or investing in the deposit liabilities of failed banks or thrifts about the standards they will be expected to meet in order to qualify to bid on a failed institution.

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. For prior lists, see below, and send any additions my way. Saxon Oil Company, based in Dallas, has engaged SMH Capital to advise is on evaluating strategic alternatives. (Read More) Essentially Group Ltd, a sports market group based in London, said it was in preliminary talks with a third part over a possible sale of the company. Dow Jones is in the early stages of selling its stock market index business. Goldman Sachs is running the process. Morgan Stanley is considering selling its Van Kampen Investments unit. The company has been approached about a deal. (

Leverage is Back! Is Warner Chilcott's highly leveraged deal for P&G's pharma business a good thing? (Felix Salmon, Research Recap) More New Lenders: The former head of Carlyle's leveraged finance division is hanging his own shingle. (Bloomberg) IPO Fever Cont... More private companies are going public-and the new companies are outperforming blue chips. (Businessweek) Extra! Extra! The Wall Street Journal is trying too hard to break a big story. (Business Insider) In Defense of the MBA: A University of Washington professor argues that the degree isn't the problem, it's the solution-to poorly run companies, unethical managers, and a crippled economy (BW)

When comparing this default cycle with default cycles past, once thing is certain: Today's capital structures are a lot more complex. For starters, no one knows who holds what. In the boom era of lending between 2005 and 2007, banks didn't just write a check and wait for the interest to accrue-they syndicated it out through CLOs, which were purchased by hedge funds. When faced with a workout situation, these nontraditional holders are less likely to "take their medicine," as one source put it, by taking a writedown on the company and right-sizing its debt load. They'd rather take control of the company through the bankruptcy courts (a scary practice for many of them which have never acted as operators), or "kick the can down the road," a term that's become popular in recent weeks. Lenders have taken to "kicking the can down the road," or extending debt maturities in exchange for more onerous terms on companies that are struggling to service their crippling debt loads. Some buyout pros believe these "amend and extend" policies are responsible for holding back the tidal wave of bankruptcies that bankruptcy professionals predicted at the beginning of this year. In the firm's Q2 earnings call this month, Blackstone

UPDATE: The story has been updated to include comment from the firm. Landmark Partners has shelved fundraising efforts for its new hybrid secondaries fund, a source close to the situation said. The Simsbury, Conn.-based secondaries firm launched Hybrid Secondary Fund LP earlier this year to invest in private equity funds which are less than 50% funded. The fund had a $400 million target. Merrill Lynch acted as its placement agent.

Welcome to the inadvertently longest Second Opinion links list of all time. The Private Equity Model Needs To Be Overhauled: "They are used to striding into offices, slashing costs and throwing out dead wood." (Telegraph) On the Other Hand: Wipeouts likely won't kill private equity (Breakingviews) But you already knew that. Advent's Purchase of Charlotte Russe: Is a big PR failure and probably a good first-deal lesson on the part of new buyout firm KarpReilly, founded by alumni of Apax Partners. (peHUB) You may remember the firm took a minority stake in the company and then made an unsolicited take-private offer last year (for around half of what Advent is paying, to boot). That offer happened to mentioned that the firm could make an even lower bid. It was rebuffed, and the shareholders later rejected the firm's attempt to get board seats as well. The firm eventually withdrew its bid. Read the history of that mess here. Postcards from the Hamptons: How is that vacation spot for the rich holding up? According to Dealbook, One restaurant manager said: "I think we're probably not seeing as much money being spent on really, really expensive wine," she said, "but people are still buying wine." (DB) Imagining a Profitable YouTube: "Google executives say that day is coming, but they've been vague about when." (SFGate) Lloyd Blankfein Goes Into Panic Mode: The Goldman Sachs bad press machine continues today with a hit piece on the firm's "trader huddles" in this mornings Wall Street Journal. Today CNBC talking head Charlie Gasparino wrote on the Daily Beast that "Wall Street CEO who considers himself a friend of the Goldman CEO" said Blankfein "looks like shit," these days. Tactful. Read about more of Blankfein's travails at Cityfile.

If you were a company with increasing year-over-year losses in the midst of a recession, would you choose to emerge from bankruptcy with 9.1x leverage or with 3x leverage? Might not sound like much of a choice, but that's because you're not U.S. Shipping Partners, the long-haul marine transportation business once bestowed with the cursed Buyouts Deal of the Year Award. The company, which filed for bankruptcy in May, has actually chosen the 9.1x leverage option. Former owner Sterling Investment Partners lost its entire $40 million equity investment and has removed itself from the situation entirely.