Erin Griffith

Another Side of the Pay For Play Scandals: Six degrees of how "toxic waste" lands in teachers' retirement funds. (Talking Points Memo) No AriZona? Recent mentions of Patriarch Partners' Lynn Tilton in the press in her battle to win Polaroid have sparked new debates in her ownership of AriZona Iced Tea. Namely, does she own 2%, or does she not? (NY Post) Compensating: Moody's is being too negative. (Business Insider) NVCA: Recommendations for that IPO revival. (Boston Globe) When In Doubt, Spin It Out: "Their owners don't want them, but no other company seems ready to buy them for enough money to prevent further embarrassment to their parents' management." (Bits)

Aldus Equity has released its reaction to today's civil complaint by the SEC, which has accused Aldus and its founder, Saul Meyer, of securities fraud. The firm issued a response through its attorney, which Buyouts shared with us. Here are some choice excerpts: The attorney representing Aldus Equity, the firm the U.S. Securities and Exchange Commission wants to add to its civil complaint regarding investments fro the New York State Common Retirement Fund, today called the threatened legal action "appalling and careless" with the law and with people's reputations. Matthew D. Orwig said the SEC filed its court motion without completing an investigation or fulfilling a commitment to meet with Aldus principles before taking any legal action. "We've been trying to communicate with them for the last two weeks," said Orweg. "how can they make these public statements before they complete and investigation? Maybe they want a 'trial by news release' but that's not the way the judicial system works." Separately, Aldus responded to charges against Meyer specifically: "At Aldus, we can't begin to describe our disappointment and astonishment regarding the unexpected legal developments in New York today. Saul Meyer has been our colleague for five years, and our heart goes out to Saul and his family during this unsettling time. Obviously, as this time, Saul's full focus will be on his issues in New York. At the firm, we are working rapidly to communicate with our clients, employees and associates. Our highest priority is the commitment to our clients' best interests. In the immediate and long-term future, we will apply all of our resolve, focus and talents to those goals."

Atlanta buyout firm Arcapita is in the midst of selling Church’s Chicken, according to a source familiar with the situation. The firm has retained Bank of America to run the auction. Seeing a healthy company go on the auction block is a bit of uplifting news for M&A bankers, who haven’t gotten much action lately. But the term “healthy” is limited to the company’s performance—the offerings of the southern fast food chain won’t keep your cholesterol down. Texas-based Church’s Chicken has shown stable growth of between 8% and 10% through recession as consumers trade down to less expensive dining. In first round discussions, the company attracted interest from a select group of ten middle market private equity bidders. The pool of suitors has since been narrowed to three or four, and its unclear whether second round bids have been submitted, the source said.

PPIP Not A Total Bust: More than 100 participants applied to get a piece of PPIP today. (Dealscape) Speaking of Twitter: Today we learned the site has a low 30% retention rate. (Reuters) Fred Wilson Crunches Numbers: The Venture Capital Math Problem (A VC) Adding to the Conversation: Mark Reibolt criticizes a Forbes piece, saying, "The venture capital landscape is evolving quickly, so the same old methods and mindsets don't apply." (Mark-To-Market)

If you’re a loan originator, you probably spent the first quarter of this year bored to tears or worried about your job. Quarterly league tables from Standard & Poor’s Leveraged Commentary & Data only confirmed what our numerous reports on lender layoffs foreshadowed: New issuances are down, down down. In fact, in the latest issue of Buyouts, Ari Nathanson reported that new debt issuance was so low S&P couldn’t even release quarterly averages on purchase price multiples and LBO leverage. Let me repeat: There were not enough deals in the first quarter to even average deal or leverage multiples.

UPDATE The story has been updated to include additional comments from Liaudet. Desperate private equity and venture capital limited partners are considering paying “negative premiums” to secondary buyers in order to get out of their investments. This goes beyond a simple discount to net asset value (NAV). This means limited partners actually hand over cash to secondary buyers in exchange for taking over their stakes. It’s music to a secondary buyer’s ears after years of paying actual premiums for LP stakes. The return of the negative premium isn’t shocking, as discounts on the secondary market sink from 50% of NAV all the way to 100%. LP interests were exchanged at negative premiums in the aftermath of the venture bubble as well. However, it’s slightly different this time, because this backward pricing is a result of LP capital constraints and not the performance of the underlying funds, according to intermediaries I spoke with.

Lotta India News Today: Apparently Henry Kravis was there chatting with some reporters. He said KKR would invest cautiously. (NY Times). Meanwhile, The Business Standard says PE firms in the country prefer to be minority shareholders. (Business Standard) Also, India's MBAs face a tough job market. (BW) Speaking of MBAs: Here's another one from the intrepid BusinessWeek reporters on "The MBA Support System." (BW) If that system doesn't help, try our Desperate Internship Rodeo. And Don't Worry: Because even those that have jobs are undergoing a fundamental shift in the way they get paid. Financial News outlines the Goldman bonus cuts. (FN) On That Note: Dealbook asks if Wall Street's pay is falling like a pet rock. (DB) Felix Salmon: When countries go to zero. (Reuters)

Siguler Guff managing director Ching Tan said today that his firm is looking into China's distressed market, but has yet to make any plays. It's not certain which fund the investment would come from, since the firm recently closed its third distressed fund-of-funds and is on the cusp of closing its second BRIC fund (BRIC stands for Brazil, India, Russia & China). My best guess is that it would be the latter, since that's the fund Ching manages. Ching's comments were made on a panel at China Venture Capital & Private Equity Forum at the Westin Times Square, New York. Siguler Guff's interest in the area contrasts sharply with comments made earlier today by a panel "regional experts" on distressed investing in Asia. According to Reuters, investors at a FinanceAsia conference said it is too early to jump into distressed investing across Asia.

Did You Know: There are two ways to go bankrupt: "Gradually, and then suddenly." (The Deal) April Bloom: So, is private equity fundraising on its way back from the dead? Dealscape thinks so. (Dealscape) Plenty of talk: On New York Times's article about Geithner's close relationships with Wall Streeters. (NY Times) Itchy? Private Equity is Itchy? The month-long equities rally has you all IPO crazy already? (FT) Deal Profile: Deal Journal Has posted a deal profile, via DealLogic, about the biggest deal of the day, KKR's play for Kirin Brewery. Can we think of any more words to add to the end of "Deal"? (Deal Journal)

If there’s one kind of alternative asset investment that looks worse than private equity, it’s probably real estate (you could argue hedge funds too, I suppose, but they don’t have multi-year lock-up periods). As such, investors are looking with greater interest at secondary investments which target real estate funds. There are at least four real […]