Erin Griffith

Dean Nelson, founder and head of KKR's operational group (KKR Capstone), said during today's Reuters PE and Hedge Fund Summit that he only flies coach. This despite being having “top elite status” on at least two airlines. So take that, Wall Street Culture of Excess. (On one hand, if there is any industry more acutely aware of its conspicuous consumption, it's private equity. The magnifying glass has been on private equity's excessive lifestyles far longer than it has on Wall Street CEOs, thanks to the SEIU.) Beyond that, Nelson defended KKR’s portfolio companies, saying that the firm’s lineup of “defensible” companies were hanging in, despite posting sizable mark-downs for 2008. Companies like TXU, Dollar General, First Data and HCA are performing well, he said.

Lehman Wants its Knickknacks Back: Sorry Barclays, your eBay dreams are over. (Bloomberg) That's What Blogs Are For: Responses to Larry's post on what makes a good venture return. (A VC) Recession Humour: Cocktail recipes for the recession, including a Nasdaiquiri and a Bloody Maria Bartiromo. (CNBC) Oops: Erin Burnett's Freudian slip on air. (Youtube)

News that first-time fund West Hill Partners would fold reveals a slightly unsettling truth about shrinking fund sizes: While the move has been applauded at some mega-funds, it can be a death sentence for those in the middle market. It’s just another reason for LPs to decline new commitments, even with old relationships. ‘What if the GP cuts its fund size, and we are suddenly over-exposed?’ they worry. That’s the fate West Hill suffered. The commitments it had gathered were contingent on the firm meeting its entire target. When it wasn’t able to do so, the investors backed out. The situation is happening with more firms than just West Hill.

No scandal is without its embarrassing details. Yesterday’s pay-for-play indictments revealed one especially juicy tidbit. State of NY’s Chief Investment Officer David Loglisci is charged with taking gifts and bribes in exchange for commitments from the state’s pension fund. Among those gifts? Sham investments to help his brothers produce a low-budget movie called “Chooch.” The movie, released in 2004, bares the tagline: In the neighborhood of Bocci Park, Queens, God forbid you mess up and someone gives you a nickname. It can stick with you the rest of your life. Thank private equity for inadvertently helping to bring this gem to the public. A reviewer on RottenTomatoes.com called it “an absolute chore to sit through, unless you happen to come from the same block as the filmmakers, in which case you might produce a few charitable chuckles, just to be nice.” We've posted the trailer after the jump...

As usual, I have a week’s worth of Moody’s and S&P downgrades on PE-backed companies. These are only the downgrades that affect companies that S&P and Moody’s consider part of their respective “Weakest Links” and “Bottom Rung” lists. This week there are five, the majority of which are mega-buyouts. Apollo Management is a repeat offender.

Watch Out AIG: There were protesters on Wall Street today. Here's AIG's internal memo on how to deal with them. (Gawker) Except: Turns out there was more press than protesters there. (Clusterstock) GE Capital: Everything is juuuuust fiiiiiiiiine. (AP) The Donald: Blue-collar workers taking over a fancy tennis club owned by Donald Trump? Cityfile smells a revolution! (Cityfile)

The auction for AIG’s advisor unit has narrowed to two private equity bidders: Clayton Dubilier & Rice and Warburg Pincus, a source told peHUB. Two previously reported bidders, GTCR Golder Rauner, and strategic bidder Ameriprise, have dropped out. Dealscape reported news of Ameriprise’s exit from the process last week. The business includes three broker-dealer businesses: […]

With all the hubbub over yesterday’s testimony from AIG CEO Edward Liddy (which varying news outlets referred to as a “scalping” and a “lynching” and “dunk tank”) I thought it’d be nice to revisit a time when Liddy wasn’t in the hot seat, but rather a soft recliner, at buyout firm Clayton Dubilier & Rice. It’s been less than a year since took on the role of operating partner at CD&R after running Allstate Corp. It’s only been six months since he abandoned that role and, in his words "came out of retirement" to take on his current gig as the CEO of AIG. Below, we compare some of the questions and statements fired at him yesterday with

Secondary intermediary Probitas Partners confirmed it is in discussions to create a liquidity vehicle that pairs sovereign wealth fund money with cash-strapped LPs. The vehicle, called Prospective, aims to bridge the pricing disparity between sellers and buyers of secondary limited partnership stakes by splitting the commitment. Prospective will separate LP stakes into funded and unfunded portions. The buyer—a SWF, potentially—agrees to fund future capital calls, and the seller—the current LP stakeholder—can still participate in the upside of its invested capital without taking a loss on the deeply discounted secondary market.

Speechless: CNBC suggests we declare War on Greed because declaring war on an idea worked for the War on Terror. This is a joke right? I mean, the satire is apparent on way too many levels. Right? (Via Dealbreaker.) Gag Order: Christopher Fountain writes: "Just about a year ago I was fired from the Greenwich Post after the manager of their biggest advertiser, Coldwell Banker Greenwich, threatened to pull their advertising if I wasn't yanked." What was he fired for? Commenting on the large debt load the company's LBO backer, Apollo Management, had piled on the company. (For What it's Worth) Seachange: In yet another way PE firms will be doing more to please LPs, Business Standard reports that hurdle rates will likely rise. (Business Standard) Kudlow and Welch: Last night's interview outtakes. (Kudlow's Money Politic$)