Erin Griffith

Here's more proof of how tough fundraising is (after yesterday's proof that it's not tough for everyone). Two funds which appear to be safe bets are struggling. One has at a couple of successful exit under its belt, the other focuses on banks, a timely strategy. Blue Wolf Capital, a New York-based private equity firm, has raised $112.1 million from nine investors toward Blue Wolf Capital Fund II LP. The firm raised an additional $4.1 million from nine investors in a separate feeder fund. That fundraise seems to be a problem because the firm held a close on $100 million all the way back in September 2008. Only raising $12 million more in a year suggests to me that the firm will likely lower its fundraising goal from $250 million.

As we reported yesterday, Sun Capital's investor advisory board approached the firm about reducing the size of its fifth fund. Those talks are in very early stages with nothing agreed-upon yet, but today a source revealed a few more details. Investors are seeking a fund cut of approximately 25% of remaining capital, peHUB has learned. As reported, the $6 billion fund has $4.44 billion remaining, so, the size cut would be approximately $1.11 billion. The source said Sun Capital's founders, Rodger Krouse and and Marc Leder, have been receptive to the idea of a reduction and are working on a solution with the investors. However, Sun Capital's fee structure may complicate things.

It's summer slowdown season, and M&A bankers are feeling the fizzle. 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. Jones Soda, a publicly traded soft drink business, said there is "substantial doubt" that the company can continue as a going concern. The company is looking into possibility of public or private offerings of debt or equity securities, joint ventures with one or more strategic partners and other strategic alternatives. ING Groep NV is looking to sell assets to raise money to pay back its emergency government aid but has not received offers that suit its desired price. Coalcorp Mining Inc has resumed operations at its La Fancia mine, which it announced was a candidate for divestiture last week.

Well if George Says So: The U.S. economy has hit bottom and the current quarter will see positive growth due to the government's stimulus spending, billionaire financier George Soros said. (Reuters) I Swear, He's Cool: "JPMorgan Chase CEO Jamie Dimon is taking the rare step of meeting with the heads of the biggest buyout shops to assure them that he's behind his new -- but relatively unknown -- head of the team that serves private-equity firms." (NY Post) In the Atticus Aftermath: The Five Greatest Hedge Fund Farewells. (Deal Journal) There's Something About Mary: Felix Salmon noticed a change in the WSJ Stipple drawing of SEC Chairwoman Mary Shapiro. (Reuters)

Today TA Associates closed one of the first “LP-friendly” buyout funds to emerge from the credit crunch. The firm raised $4 billion for TA XI, its fund for U.S.-based investors. (The firm has a separate fund for foreign investors.) The fact that it was oversubscribed by $500 million only proves that one nice gesture goes a long way. To refresh your memory, the Boston-based growth investment firm lowered the carried interest on the fund from 25% to 20%, lowered its management fee to an average of 1.74 percent of commitments, agreed to offset management fees with transaction and director fees, and added a no-fault divorce clause. I spoke with Managing Director Brian Conway about the motivation behind the change in terms, the negative IRR of TA’s tenth fund, and the firm’s strategy as a growth investor deploying cash in a not-growing economy.

Monday was the last day for comments on the FDIC's proposed rules for private equity investments in failed banks. A group of large private equity firms calling themselves the "Private Equity Commenters" submitted a letter, which we've posted below. The letter, submitted by law firm Simpson Thacher, speaks for Blackstone Group, Centerbridge Partners, Corsair Capital, Irving Place Capital, Lightyear Capital, Oak Hill Capital Partners and TPG Capital. A few of the firms have already been involved in banking transactions--Blackstone and Centerbridge were part of the group that took over BankUnited. The letter addresses the same concerns many others have expressed regarding required capital levels, cross-guarantee liabilities, and the definition of "source of strength," among others, while highlighting the benefits of private investments in banks. Those include job preservation, community support and increased competition which benefits customers, the letter states. At around 11 pages, it's probably the most in-depth response the FDIC has recieved to date. Read it in full below.

At least that’s what a new mid-year report from Cogent Partners observes. The secondary intermediary firm closed more than $2.5 billion worth of transactions in the first half of 2009, and less than 20% of those deals had a traditional secondary fund on the buyside. (See first chart below) That’s troubling news considering the sheer amount of money secondary funds raised last year. Thomson Reuters doesn’t track secondary fundraising but an unscientific survey revealed that just nine placement agencies raised a collective $24.1 billion in secondary funds in 2008, to give you a sense of the market. Meanwhile a chart peHUB published in April estimates that secondary firms raising new funds are targeting an additional $33 billion in commitments. Yet despite rampant enthusiasm for the deeply discounted secondary market earlier this year, the wave of activity has yet to take place. Traditional buyers have largely remained on the sidelines, thanks to sellers’ unwillingness to sell at such steep discounts.

New Firm Alert: Mahindra Partners, the in-house private equity group of Mahindra & Mahindra. (Reuters) What Are PE Pros Reading This Summer? Contributions from professionals at CalPERS, Carlyle, THL, Bain Capital, Providence Equity, New Mountain Capital and more...(Private Equity Beat) Need a Job? Go to China. (New York Times) Need a Job In Private Equity? Here's some advice from Abby Adlerman, who leads the PE practice at executive recruiter Russell Reynolds. (The Deal)

If you’re not calling your fund top quartile, you aren’t fudging the numbers enough. According to a study picked up by Private Equity Online, 77% of funds could claim their performance places them in the top 25% of private equity funds. If the math on that sounds a little screwy, that’s because it is. According to data from Peracs, 77% of private equity funds can claim top-quartile status if they manipulate their vintage year when applying it to benchmark data. So the funds aren’t lying about their performance. They’re just manipulating the benchmark criteria. Meaning, anyone who doesn’t say they’re in the top quartile must really be in that bottom 23%. Either way, as we’re reminded once again, it’s a meaningless term. So can we finally agree to stop bragging about “top quartile” funds now?

Leonard Green & Partners has won shareholder approval on an amendment to its fifth buyout fund, Green Equity Investors V LP, according to a source familiar with the firm. The firm’s investors have granted the fund’s managers approval to invest up to 25% of the $5.3 billion fund, or $1.325 billion, in public equity. That’s […]