Twenty percent of institutional investors plan to decrease their target allocation to private equity over the coming year, according to the latest results of a bi-annual survey conducted by Coller Capital. This is the largest percentage of expectant downsizers since Coller began the survey in 2004, with the group usually representing between just 3% and 6% of respondents. It's worth noting that another 15% or so plan to actually increase their target allocations, although that figure has dropped precipitously over the past two years (it had approached 50% in the summer of 2007). One reason for the decrease is simply that there will be fewer private equity firms in which to invest. LPs expect 28% of today's VC firms and 23% of today's buyout firms will fail to raise a new fund over the next seven years. Those are pretty heady numbers, particularly for a VC industry that already experienced a minor shakeout earlier this decade. Moreover, 84% of LPs report having chosen not to reinvest with an existing GP relationship, compared to just 45% three years ago.
(Reuters) – U.S. hotel chain Extended Stay Inc. filed for bankruptcy protection on Monday, becoming the latest victim of the U.S. recession as business travel has declined amid corporate cutbacks. The company, which filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Manhattan, said it had no plans to close or sell off any […]
Regardless of whether you believe the market bottom is real or red herring, the year's IPOs have performed well -- a fact not lost on exit-hungry private equity firms. This year, the rare PE-backed IPOs have come from the middle markets (Bridgepoint Education, Rosetta Stone), even though it's the mega-buyouts that need them most. With portfolio company valuations starting at $5 billion, an IPO is often a mega-firm's only way out. If any PE-backed company is positioned to go public, it's KKR's discount retailer, Dollar General. Speculation on the transaction began in January, when Breakingviews argued that the company was worth $7.5 billion (minting KKR better than a 33% return, according to the story).
(Reuters) – Railway equipment supplier Greenbrier Cos Inc (GBX.N) said it received a $75 million three-year term loan from Wilbur Ross’ WL Ross & Co LLC and reduced the size of its North American revolving credit facility led by Bank of America. The WL Ross loan, which contains no financial covenants, will mature in June […]
(Reuters) – MagnaChip Semiconductor said on Friday its parent companies filed for Chapter 11 bankruptcy protection in the United States, after a South Korean investment fund acquired assets of the troubled chip maker. South Korea-based MagnaChip said on Thursday it had signed a deal with a fund led by KTB Securities (030210.KS) to acquire MagnaChip […]
Golden Gate Capital and Infor have agreed to buy SoftBrands Inc. (AMEX: SBN), a Minneapolis-based provider of enterprise software to the manufacturing and hospitality markets. The deal is valued at approximately $80 million, or $0.92 per share (100% premium to Friday's closing price).Wells Fargo Foothill, an existing SoftBrands lender, has agreed to provide leveraged financing.
HONG KONG (Reuters) – Kohlberg Kravis Roberts & Co. said it completed a series of investments in Ma Anshan Modern Farming Co Ltd, a leading dairy farm company headquartered in China’s central province of Anhui. Modern Dairy is one of the largest operators of centralised large-scale dairy farms in China, according to the announcement. With […]
CHICAGO (Reuters) – Activist investor Carl Icahn is considering making another attempt to take over bankrupt auto parts supplier Delphi Corp (DPHIQ.PK), the New York Post reported on Saturday. The report, which cited an unnamed source with direct knowledge of the matter, said that Icahn is considering another run now that a federal bankruptcy court […]
Birch Hill Equity Partners and Westerkirk Capital have sponsored a recapitalization of Shred-it International Inc., and Ontario-based provider of on-site document destruction services and records retention information management. No financial terms were disclosed. National Bank of Canada and Toronto Dominion Bank co-led the senior debt financing, while Imperial Capital ran the process on behalf of Shred-It.
(Reuters) - U.S. regulators are drawing up rules that would make it easier for private equity firms to acquire troubled banks, aiming to free up more funds to recapitalise lenders, the Financial Times reported, citing people close to the situation. The plan, which has yet to be finalised, may require private equity companies to inject substantial capital into lenders and to agree not to sell them for at least two years, the newspaper reported. Obama administration officials continue to stress concerns about ensuring sufficient capital in the financial system, even as several financial institutions have begun lining up to return funds borrowed under the government's $700 billion troubled asset relief program to cope with the financial crisis.