Erin Griffith

This morning’s news that Riverstone Holdings will pay $30 million to the New York State Common Fund left me a bit puzzled. Just a few weeks ago, Riverstone’s partner, The Carlyle Group, paid the pension fund $20 million for its role in the same kickback scandal. Setting aside the message this “settlement” system sends (buy your way out of trouble!), why does The Carlyle Group get to pay $10 million less than Riverstone? Is Carlyle a less bad actor? Are the $20 million and $30 million totally arbitrary? As it turns out, no. The $30 million and $20 million settlement fees represent the management fees New York State Common paid to each firm for the three funds alleged to have received commitments via a pay-to-play scheme. The firms managed to bill their investors with perfectly round numbers, it seems.

May was a big month for junk bonds: More than $15.9 billion worth of the high yield notes were issued, which was the highest monthly total since June 2008. That figure includes issuances from several buyout-backed companies, including large offerings from Harrah's Entertainment, Apria Healthcare and Gibson Energy Holdings. Buyouts' Ari Nathanson wrote that the action offers a glimmer of hope that investors might be more comfortable with risk, and perhaps hungry to invest in high yield debt for new leveraged buyouts. I'm wondering if it's not based on risk appetite at all, but simply reflects a desire to invest in anything. Some of these issuers go beyond "risk." Harrah's, for example, raised $1.323 billion worth of junk bonds, an increase from the original plan to sell $1 billion. Since its debut, the company's notes traded at a respectable 96 to 97 cents on the dollar.

This is Just Wrong: What kind of genius does it take to turn $517 million into $75 million over the course of 39 months? That's what Talbots did and Golden Gate Capital capitalized on. (Footnoted) Peter Theil: At a conference, he calls the tech boom of the late 90s a fraud. (Valleywag) What's Wrong With Financial News on Television: Proof that nobody at Fox Business News knows what's going on, at all. (Gawker) Just Depressing: Now that the U.S. taxpayers are minority shareholders in Citigroup, we might be happy to learn that the company is using its resources to sue a networking website called Womenco.com, because its similar to Citigroup's own "Women & Co.," a money managing business. Christ. (Cityfile) Regulatory Shopping: Private equity firms are using Regulatory Arbitrage. Writes Money Morning, "The financial Barbarians are at the gates of the U.S. banking sector." (MM) Private Equity: Not so shareholder friendly? (

Trian Fund Management, the investment firm backed by Nelson Peltz, has filed to raise $300 million through the IPO of a business development corporation. Newly formed subsidiary Trian Capital Corporation will IPO as a closed-end, non-diversified investment company. According to the prospectus, filed May 27, Trian Capital will invest in “leveraged companies” in the form […]

As the weather (slowly) warms up, plenty of M&A bankers are hoping the market for deals will as well. We’ve noticed a few more targets coming to market in recent weeks and have compiled a list of some of those we’ve come across. Our sources are various news reports and the Buyouts “Seeking Buyers” list. The following companies (among many, many others) are either formally considering “strategic alternatives,” reported to be on the block, or rumored to be in sale talks in the past week. I can’t be comprehensive, but I can try. For prior lists, see below, and send any additions my way. Cox Communications has announced it hired Goldman Sachs to advise it in the possible sale of subsidiary Travel Channel Media. The unit includes the Travel Channel television network and travelchannel.com. Google is still acquisitive for small companies. The firm's acquisition strategy will focus on the cloud, mobile, and open source distribution of software sectors.

Wilbur Ross on The Auto Industry: "Wilbur Ross sees trouble for suppliers who will need to restart parts production after Chrysler LLC and General Motors exit bankruptcy." (Auto News) ARRR: Footnoted.org finds evidence of pirates in SEC filings. (Freeseas) Barry Ritholtz: How to fix financial television. (The Big Picture)

Buyout shop Thomas H. Lee Partners has filed to take its credit unit public as a business development corporation (BDC). THL Credit Inc. seeks to raise $300 million in a blind pool IPO with no legacy investments, according to a June 1 filing with the Securities and Exchange Commission. Merrill Lynch, Citigroup Global Markets and Deutsche Bank […]

Arcapita has agreed to sell restaurant operator Church’s Chicken to Friedman Fleischer & Lowe, according to a source close to the situation. The deal, advised on the sell side by Bank of America, represents a rare exit of a stable, growing company. Church’s Chicken has annual revenues that have grown between 8% and 10% through the recession as consumers trade down to less expensive dining. Within the past two weeks, San Francisco-based Friedman Fleischer was selected as the winning bidder from an auction that started with as many as ten buyout suitors, the source said. In April peHUB reported the sellers had narrowed the bidding pool to three or four parties. At the time, Atlanta-based Arcapita was seeking a full valuation of up to 8x Ebitda for the company.

Here's a look at the past week's scoops, opinions and analysis from the peHUB blogging team. Tagg Romney's Fund Nears Its Target [Fundraising Scoops] Fundraising Updates: EIV, Lenox, CapitalSouth, Alerion [Fundraising Scoops] Welsh, Carson, Anderson, Stowe Wraps Fund XI At $3.7B [Fundraising Scoops] Centerview Closes Debut Fund Just Above Target's Halfway Point [Fundraising Scoops] Patriot Capital Takes 8 First Round Bids, None From Fifth Street [Auction Scoop] New Cartesian Business Finds Visibility in the Eye of the Storm [Q&A] Mercato Partners Takes A Practical Approach to Venture Capital [Q&A] Q&A with Josh Kopelman: I Never Wanted to Be a VC Who Offers "Long, Drawn-Out Maybes" [Q&A] Heesen Says Cleantech Still Hot [Q&A] New Firms Must Get Creative To Do Deals: Meet Current Capital [Q&A] WaveRunning Wolpert On a Mission [Q&A] NFL Player Getting His Kicks From VC [Jocks] Drew Bledsoe Throws Private Equity Pass [Jocks] KKR Gives A Peek [Docs] LP Options When GPs Go Bad [Docs] Private Equity Dry Powder At All-Time High [It's Shopping Time] Are Bank Buyouts Signs of Strategy Drift? [Musings] Oh Well, No PE Owner for Hummer [Nevermind] I Have an Issue With S&P [Rants] Where's The Beef? [NY Scandal Lives On] Showdown in Texas, as Former Colleagues Fight Each Other Over Clawbacks [Yikes] VC-Backed Bust: Proficiency Inc. [Not That Proficient] RNC PR Director Calls Mark Zuckerberg's Sister "Totally Full of Sh*t," Then Backpedals: "I LOVE Facebook" [The Power of Transparency] E Ink Acquisition: Great for E-Book Readers; Not So Great for Company's Backers [Follies] What Financial Services VCs Worry? [Performance #s] On Twitter, Bromance Thrives [Studies] Ron Conway: Arrangement with Baseline Ventures Still Friendly, Really [More Bromance] SEC Now Probing Its Own Staff Around Mark Cuban Investigation [Scandals] Cranium Cofounder Starts Rechargeable Battery Company, in Ghana [Second Acts] Reed Returns to CRV, Wither Lowenstein in Boston? [HR] Weekly Downgrade Wrap-Up (Upgrades Galore!) [Regulars] Midweek M&A Madness [Regulars] The Impending Demise of the University [Links List] Doubling Your Money on Jimmy Choo [Links List] The GM Magic Act [Links List] The Tyranny of Cost-Benefit Analysis [Links List] Thanks to the Grumpy VC [Links list] Hybrid IPOs (HIPOs?) [Links List] Why China Isn't the Next Silicon Valley [Links List] Beware the Complicated Deal [Links List] Web 3.0 [Links List] Something for Nothing [Vox Populi] OpenTable - VCs Waste Another IPO [Vox Populi] New England's Top 10 Innovators [Vox Populi] Keep Browsing: peHUB Rewind May 29, peHUB Rewind May 22, peHUB Rewind May 14, peHUB Rewind May 8, peHUB Rewind May 3, peHUB Rewind April 17, peHUB Rewind April 10, peHUB Rewind April 27

Book Smart vs. Street Smart: "White-collar fugitives often fail to escape the law because of what prosecutors and bounty hunters say is a lack of preparation for the rigors of life on the lam." Brilliant. (Bloomberg) Showdown!!! Venture Capitalists are about to turn in private equity players: "The venture capital industry is gearing up to fight against raising the tax on carried interest. A key battle is differentiating itself from the private equity industry." (Bits) Rate Shopping: The nerve. Moody's is complaining that TALF is causing issuers to "shop" for credit-ratings, or seek the highest ratings with the lowest standards, according to Moody's Corp. (Bloomberg) Forced Default: Clear Channel's lenders want a forced default. Ouch. (FT) Closer Look: "The Worrying Wall of Debt" (The Deal) Movie Stars: They've casted a man to play Bernie Madoff in an upcoming movie. (Cityfile)