Erin Griffith

This morning’s LBO Wire led with fundraising news of Prophet Equity, a Dallas-based turnaround firm in the market with its debut fund. According to the story, Prophet has $200 million in commitments toward its $250 million goal, which is a pretty impressive feat in this market. (I believe a random LP recently said, “It’s so […]

Gotham Consulting Partners released the results of a private equity survey on operating value creation. Not surprisingly, buyout pros said operating value improvement was the most important “lever” and financial leverage was the least important. I can’t help but wonder how helpful it is to know what buyout pros say they value without much data as to how the buyout sausage is actually made. No buyout firm in the country is going to say financial engineering and leverage is its most important lever, now would a firm admit that it doesn’t really add much, operationally, to its portfolio companies. The contradictions are even apparent in the survey: Despite “operational improvements” being in vogue since the credit crunch, the survey revealed that due diligence approaches have not changed much in recent years, and that approaches to portfolio management are still pretty much the same. Even the recent trend of operating partners to buyout firm rosters seems to have topped out with the onset of private equity layoffs. You can get the full survey results below.

Clear Channel Bankruptcy? NY Post reports that the company is in early stage discussions with lenders about a pre-pack Chapter 11. (NY Post) Comeback? The last two weeks of equity issuance have been on par with the past four months. (Thomson Reuters) Carlyle in MENA: The firm is close to closing a Middle Eastern deal this year. (WSJ) Yikes: Sullivan & Cromwell is realllly cutting back on its summer program. (Above the Law)

Here's a look at the past week's scoops, opinions and analysis from the peHUB blogging team. First, the good news: peHUB won its charity game of baseball at Fenway Park. Photos from the event are posted here and here. Now the bad news: Where to start. For one, the pay-to-play scandal continues. Julio Ramirez, a former Wetherly and Park Hill placement agent, has pled guilty for his involvement. Dan had a few thoughts on that topic. Then we have Carlyle Group's $20 million "fee" and code of conduct, which is neither an admission of wrongdoing or a denial of it. Dan liveblogged the announcement and followed up with some opinions, meanwhile I attended the press conference. Oh, and CalPERS adopted a new policy for its use of placement agents. Also, we saw more ratings downgrades, the worst fear of LPs is coming true, private equity made bakers cry, a GS Capital company may trip its covenants, LP defaults, Things weren't much better on the venture side. Larry outlined why it sucks to be a VC. Facebook is getting beat up by poets. And a secondary firm is the most active venture capital firm. Prism VentureWorks suspended fundraising. But it's not doom and gloom forever. M&A has shown signs of picking up-here is our weekly Midweek M&A Madness auction round-up. It's perfect timing, as we learned that turnaround investors are calling the bottom. Meanwhile a Thomson Reuters survey said dealmakers expect M&A to pick up in the second half of the year. Didn't they say that last year too? In other "green shoots" news, IPOs might be coming back. We discovered some details on the Imeem funding, and Foundry Group backed a pogoplug maker. Two new funds are in the market-EIF and Oak. And two blog posts discussed books-Blackstone Group's Pete Peterson has one and Alex has a whole list of summer reading suggestions. In people news, we learned Paul Allen will replace the president of Vulcan Capital, Stephen Moseley left StepStone (in connection with the aforementioned pension fund scandal), David Danielson is joining the U.S. Department of Energy, Healy Jones plans to leave venture capital. In random news, we find that President Obama could be related to Brad Pitt, Our Vox Populi Columnists contributed a few excellent articles. Jason Mendelson outlined a few quick ways to get fired as a lawyer. Edward Reilly wonders if bankruptcy auctions are the new buyout market. Chris Bulger wants Detroit to wake up and innovate already. Jeff Bussgang had ACL surgery and is learning investment philosophy from it (With two cadaver ACLs in my own knees, I feel his pain but can't say surgery ever inspired me to invest!) And of course, First Read and Second Opinion covered plenty of ground, including subprime people, Madoff junkies, Steve Ballmer's second-to-last laugh, people who were happy to be fired, ten biggest tech failures, MBA 2.0, Candover apologies, Cramer versus Stewart continues, and ten cleantech targets and a Twitter backlash.

It isn’t happening on a large scale, but we’re hearing that family offices, high net worth individuals, offshore vehicles, and even some general partners themselves, have begun to default on capital calls for private equity funds. As capital calls begin to roll in with no exits in sight, some private equity investors are asking themselves, […]

As usual, we have a week’s worth of ratings agency downgrades, upgrades, revisions and withdrawals on the debt of LBO-backed companies, via Standard & Poor’s and Moody’s Investor Services. Not too much action this week, after several weeks packed with amendments and exchange offers. Maybe that's because the ratings on all the really distressed debt have been withdrawn. Company: Wilton Products Sponsor: GTCR Golder Rauner Withdrawal: Moody's confirmed the company's B3 corporate family and probability of default ratings and withdrew its rating because it lacks adequate information to rate the company. Highlights: The rating reflects "the risk inherent in the company's highly leveraged capital structure which includes significant junior capital with limited rights ($195 million of mezzanine and $224 million of preferred equity).

Dispatch: Some private equity discussions from ACG in Las Vegas. (Dealscape) Loan To Own: The story of KKR's Masonite. (FT) Cramer Versus Stewart: The battle may not be over. (Wall Street Folly) The Bidding War Continues: Well Vista has sweetened its offer yet again for SumTotal. (RTT) See more background on the deal here. Sounds Familiar: VCs ignore business plans. (Dealbook) A month ago Joanna wrote something similar.

If you're like me, you've been wondering: “Why does Carlyle Group get to pay its way out of the New York Common pay-to-play scandal, while Saul Meyer and Aldus Equity face criminal charges? And why has Carlyle’s partner, Riverstone, yet to be charged?” Wonder no more. At a press conference outside his office this afternoon, NY Attorney General Andrew Cuomo told reporters that future investigations with other entities, Riverstone included, are ongoing. He said a case against Riverstone is in the works, but wouldn’t say whether the firm would be slapped with a criminal or civil case.

It Begins: Oregon plans to use the New York pension fund scandal as a way to push back on fees it pays to buyout funds and placement agents. (Oregon Business News) In Denial? Despite reports to the contrary (FT), Eversheds does not believe there will be an ‘exodus" of investors from private equity. "The private equity industry has been around for over 50 years and as such will not be materially impacted by the relatively small number of Limited Partners (LPs) that are likely to withdraw from the private equity space." (Eversheds) The World is Not Flat: Cross border deals are more often disastrous than not, Dealzone suggests. Chrysler and Fiat are about to find out. (Dealzone) Meanwhile: Public PE investors are showing signs of confidence. (Financial News) First! While Blackstone and KKR have basically said they want nothing to do with PPIP, reports show that Blackrock and PIMCO will be the first to take part. (CNBC)

Energy Investors Funds, a Boston-based firm focused on the independent power and electric utility sector, has come to market with its fourth vehicle, according to a source familiar with the situation. The fund, called United States Power Fund IV, has a target in excess of $2 billion. In an environment when funds are lowering their targets left and right, even a slight leap in fund size is surprising. Energy Investors Funds’ third effort closed on $1.35 billion in 2007. In the past, EIFs has received commitments from CalPERS, Detriot Fire & Police, Lexington Partners, New Hampshire Retirement System, New York Life Capital Partners, Orange Country Employees Retirements System and University of Toronto Asset Management. The firm has said it prefers to limit its number of investors.