Firms and Funds

Speculation is futile, this we know. But that won’t stop us from trying. Here’s a taste of predictions for 2009 fundraising numbers, from panelists at yesterday’s PEA Outlook Conference. First I’ll give you last year’s total: $266 billion. Now I’ll give you my prediction: $186 billion. I made this on January 1, and perhaps I was feeling hopeful for the new year, since the Dow was up. I’m now realizing that I probably need to make some revisions. And now, I’ll give you the expert predictions, and they don’t look pretty:

Z Capital Partners has held a $100 million first close on its debut fund, which is targeting a total of $500 million, peHUB has learned. The New York-based firm plans to make control investments in middle-market distressed companies, operational turnarounds and special situations. It’s run by Jim Zenni, former president and co-founder of Black Diamond Capital Management. www.zcap.net

NEW YORK (Reuters) – Emerging markets will likely remain a viable alternative for private-equity investors seeking returns during the deepening global financial crisis, according to an official with the International Finance Corporation. Emerging market economies are expected to still expand in 2009, said David Wilton, manager for private equity and investment funds at the IFC, […]

Saw Mill Capital has formed a strategic alliance with The Spectrum Capital Group, to identity control investment opportunities in underperforming manufacturing and services businesses. www.sawmillcapital.com

NEW YORK (Reuters) – Private equity firm Bain Capital wrote down third-quarter values for investments in media, retail, and restaurant firms such as Clear Channel, Michaels Stores and Outback Steakhouse, according to a letter obtained by Reuters.  The figures, as of Sept. 30, were in a recent letter to investors known as limited partners (LPs) […]

DAVOS, Switzerland (Reuters) – JPMorgan Chase & Co has “plenty of capital” and wants governments to stop talking about nationalizing banks, its CEO said on Thursday.   “JPMorgan would be fine if we stopped talking about (the) damn nationalization of banks … we’ve got plenty of capital,” Jamie Dimon said at the annual meeting of […]

I want to share the lovely press release my colleague got today from PA SERS, the pension system for Pennsylvania State Employees. This is apparently what we reporters get to work with when nothing happens at a meeting. From: Gentzel, Robert Sent: Wednesday, January 28, 2009 4:46 PM To: 'Reporters covering PA SERS' Subject: no news release I don't have anything to announce out of today's meeting of the PA SERS Board, so I won't be issuing a news release. That's it. A "No News Release." Now, I'm unsure of the reason behind the dearth of activity at the meeting, (was everyone hungover from an office karaoke party?), but will speculate that the lack of new commitments at the meeting is further proof of a tough fundraising market. Joked my colleague: "Everything is so bad, I bet no one bothered to even go to the meeting."

Blackstreet Capital Management has held a $91 million first close for its second fund, which is targeting $125 million. The Bethesda, Md.-based firm focuses on turnarounds and distressed opportunities in the small and middle-markets.

When a corporation makes mistakes, the CEO resigns. When a PE firm makes mistakes, it cans portfolio company management. With all this talk of a PE firm shakeout, will the heads of firms resign? It doesn't seem likely. In fact, I am not sure that has ever happened in the history of private equity. The keyman provision and ten-year tie-up period make PE heads accountable in different ways than managers of public companies. When a firm messes up royally, the top dogs stick around. Yet today we saw the head of one of the largest PE firms in the world resign. Philip Yea, CEO of 3i, stepped down after news that the company's investments plunged 21%. The difference here, of course, is that 3i is a public company.

I'm at the PEA Conference at the Grand Hyatt in New York. The theme is "Where do we go from here?" which seems ironic, since that could have easily been the theme for the PEA Outlook conference in September. If you remember, that took place just days after the Lehman, Merrill and AIG disasters. It's probably safe to say little has improved since then. I'll be attending various panels and liveblogging two events: At 9:40, a one-on-one Q&A with Erik R. Hirsch, the Chief Investment Officer of Hamilton Lane. You can find that here. At 5:05, I'll liveblog a self-proclaimed "not-so-shy" panel called "Opinions, Opinions, Opinions." Isn't that all these conferences are in the first place? You can find that here.. I'll post updates in between on topics like Cleantech, financial services, portfolio company clean-up, and of course, Pontifications On The Future. I may also be commenting on the events at the official peHUB Twitter. Erik R. Hirsch, the Chief Investment Officer of Hamilton Lane.