Jane Mendillo, who manages Harvard University's endowment fund, is disenchanted with private equity despite a 16.2% return in the asset class, according to the Wall Street Journal. The largest college endowment by assets in the U.S. is now valued at $27.4 billion, up from $26 billion a year earlier, the story said. Over the past decade, the Harvard endowment invested heavily in buyout funds but the field "has become more and more crowded—with capital, with managers and with investors," Mendillo said in the story.
The Blackstone Group's $4.7 billion buy of Dynegy has received approval from the U.S. Department of Justice and the Federal Trade Commission. The regulators also allowed a Blackstone affiliate to sell four of Dynegy's natural gas-fired assets to NRG Energy. The sale of Dynegy to Blackstone is still subject to customary closing conditions, including the approval of Dynegy shareholders.
Dave & Buster's, an entertainment/restaurant chain, said Thursday that Starlette Johnson has resigned as president, chief operating officer and director effective Sept. 30. Oak Hill Capital Partners, a PE shop with more than $8.4 billion of committed capital, bought Dave & Buster's in June.
GHX Holdings, a portfolio company of CapStreet Group, has raised an extra $21 million. GHX sold roughly $21 million in equity in August to unnamed investors, according to a Form D regulatory filing. CapStreet, and other investors, provided the funds to GHX to fuel growth, a source said. It is not clear if CapStreet has upped their stake in GHX or whether the firm bought the stock via a secondary. Houston-based CapStreet targets the lower end of the middle-market. GHX, also of Houston, distributes industrial sealing products including gaskets and hoses. Calls to GHX and CapStreet weren't returned. A hat tip to FormDs.com for help with this story.
Kevin Albert’s departure from Elevation Partners yesterday spurred a lot of talk about the media-focused PE shop’s performance and future. Since I’ve never really covered them, I just wanted to get some things straight about Elevation. The buyout shop invested $300 million into Forbes, $460 million into Palm and $210 million into Facebook (through two investments: $120 million in November 2009 and $90 million this past spring) and committed to invest up to $100 million to Yelp for about 20%. Another $100 million is going to Pandora, the Internet radio station provider, a source says.
A working paper from Prof. Jarrod Harford and Prof. Adam Kolasinski of the Foster School of Business finds some really interesting things. Portfolio company sales actually create wealth. In fact, when sponsors sell their companies to a public strategic buyer, the strategic’s stock price jumps and their long term stock price is “indistinguishable” from other acquirers's. And what about all those special dividends that PE firms supposedly take? The paper finds that portfolio companies with public debt rarely issue special dividends. And those that do occur rarely forecast future distress. Strategic sales are the most common exit, 36%, for a portfolio company, almost a third of the companies are sold to a financial buyer, 10% go IPO and 14% ended up in financial distress (I still haven’t figured out where the rest ended up). See working paper here.
San Francisco Equity Partners, a private equity firm focused on expansion-stage companies in the consumer industry, bought Zoom Eyeworks Inc., a Berkeley, Calif.-based designer and marketer of eyewear. Pacific Community Ventures and Simon Equity Partners partnered with San Francisco Equity Partners in the transaction.
(Reuters) – The founders of production company Spyglass Entertainment have signed a nonbinding letter of intent to take over management of financially troubled movie studio Metro-Goldwyn-Mayer, a source familiar with the matter said on Wednesday. The news was earlier reported by the Los Angeles Times, which said that Spyglass founders Gary Barber and Roger Birnbaum […]
(Reuters) -- Members of Goldman Sachs Group Inc's New York Principal Strategies team are in talks with several groups, including KKR, Perella Weinberg, BlackRock Inc and Carlyle Group, to possibly join one of the firms, a source familiar with the matter said. Goldman's proprietary trading desk has been in limbo as the firm works to comply with the "Volcker rule," which limits the extent banks can bet with their own capital. The source spoke on the condition of anonymity because the talks are not public. Goldman, Kohlberg Kravis Roberts and Co LP, Perella Weinberg and BlackRock declined to comment. Carlyle was not immediately available.
CardioMEMS, a Boston Millenia Partners portfolio company, has accepted a $60 million investment from and granted a $375 million purchase option to St. Jude Medical, Inc. CarioMems is an Atlanta-based medical device company. Boston Millenia is a PE firm.