Firms and Funds

Emerging Capital Partners, a Washington, D.C.-based buyout firm that invests in African companies, has sold its minority stake in SOMDIAA SA, a producer of sugar, flour and animal feed in Central Africa, for $26 million. The firm’s investment, made in 2003, earned it a 2x return. Press release: Emerging Capital Partners (ECP), an international private […]

(Reuters) Private equity firms have more than $1 trillion in firepower for deals despite a slowing fundraising trend in the second half of 2008, research and consultancy group Preqin said on Thursday. “Fundraising has undoubtedly been affected by the turmoil in the global economy in the latter half of 2008,” said Preqin spokesman Tim Friedman […]

LONDON (Reuters) – Mizuho Corporate Bank, part of Mizuho Financial Group (8411.T), said on Thursday it has cut 27 jobs across its global leveraged business. The job cuts were to remove duplication as Mizuho Corporate Bank adjusts to market conditions, it said in a statement. The bank said will continue to work on the origination, […]

The mad rush to sell commitments to private equity funds on the secondary market isn't without consequence. PE firms are keenly aware that no more than 2% of a fund’s LP interests can sell on the secondary market. If they do, the fund is no longer protected by safe harbor laws that guarantee that all-important “private” status and, more importantly, “private” taxes. If more than 2% trades on the secondary market, it could be audited and deemed a publicly-traded partnership, or PTP. Examples of PTPs include publicly-traded mutual funds. The PE fund is no longer a flow-through vehicle and, as a result, returns end up being taxed twice (GPs get taxed on the income, LPs get taxed on it after distributions). There also are safe harbors for up to 10% if it is sold in large “block transfers;” ultimately this relates to how many LPs there are. Understandably, some firms are concerned about the number of commitments that their LPs will sell on the secondary market. “The other side of the coin is so draconian,” as one source said. But GPs typically have veto power over secondary sales written into their partnership agreement. So, in order to keep their safe harbor guarantee, a number of firms have told eager-to-sell LPs they’ll just have to wait. Get in line for 2009. One lawyer I talked to said there’s a mega-buyout firm that has a two-year waiting list of eager-to-sell LPs.

LONDON (Reuters) – Private equity firms have more than $1 trillion in firepower for deals despite a slowing fundraising trend in the second half of 2008, research and consultancy group Preqin said on Thursday. “Fundraising has undoubtedly been affected by the turmoil in the global economy in the latter half of 2008,” said Preqin spokesman […]

Saybrook Capital has held a $160 million close on its $300 million-targeted distressed fund, according to LBO Wire. www.saybrook.net

The Los Angeles City Employees’ Retirement System has rescinded a $5 million commitment to Citifront Capital Partners, a small and mid-market buyout fund-of-funds. The move came at the recommendation of LACERS consultant PCA, based on the fact that Citifront had failed to secure a minimum of $50 million in capital commitments (including LACERS’ commitment). Here’s […]

NEW YORK (Reuters) – JPMorgan Chase & Co’s quarterly profit fell 76 percent as it wrote down underperforming loans and set aside more money to cover credit losses after it acquired the banking operations of failed thrift Washington Mutual Inc in September. JPMorgan posted a fourth-quarter net profit of $702 million, or 7 cents per […]

WASHINGTON/NEW YORK (Reuters) – Bank of America, the largest U.S. bank, is close to getting billions of dollars more in federal support from taxpayers, a person familiar with the matter said on Wednesday. As Congress debated the future of the government’s $700-billion financial markets rescue program, the source said that Bank of America has struggled […]

Spectrum Equity Investors is in the market with its sixth fund, according to a regulatory filing. Principal Benjamin Spero said the fund held a first close in Q4 of last year, comments he made at yesterday's Gridley Conference at the Essex House in New York. A liveblog of that conference is available here. Spero declined to comment further and his colleagues didn't return calls asking the size of the first close. However, according to the filing, the fund has a $1.25 billion target. That's not a big leap from its prior fund, a $1.2 billion pool that closed in 2005. Here's what I could could find on the performance of