Firms and Funds

NEW YORK (Reuters) – Morgan Stanley could pay $2 billion to $3 billion or more for a controlling stake in Citigroup Inc.’s Smith Barney retail brokerage business, two people familiar with the matter said. The cash would be a big boon for Citigroup, which is under tremendous pressure from the U.S. government to shore up […]

NEW YORK, Jan 9 (Reuters) – Steel Partners, a hedge fund group, plans to convert its Steel Partners II fund into an industrial holding company and list it on a U.S. stock exchange, according to a press release from the company. The plan calls for New York-based Steel’s hedge-fund investors to get shares of a […]

Note: A previous version of this story incorrectly noted the firm had lowered its fundraising target, which remains at its original level. Dominus Capital, the New York firm comprised of former Quad-C professionals, is in the process of holding a first close on its debut fund, according to two sources familiar with the situation. The firm, launched in February of last year, will finalize its first close in the coming weeks. Meanwhile, it hopes to hold a second close on $300 million later this quarter. This is nearing the fund’s $375 million target and $500 million hard cap. For a first-time fund that went to market in July, the close is relatively impressive. Probitas Partners, the firm’s placement agent, declined to comment. Dominus was founded by Gary Binning, alongside Robert D. Haswell and Ashish B. Rughwani of Quad-C. Dan reported that the three had claimed they left the firm to “pursue separate interests” yet in a matter of months, reunited under the Dominus name.

Latest Example: Riverwood Capital, which last October began raising its debut fund with a $1.25 billion target. Pretty ambitious for a first-timer in today’s market. Or maybe a bit too ambitious. The Palo Alto-based firm, which makes growth equity tech investments, is now telling prospective LPs that $750 million is probably a more realistic fund size, according to a source. Notably, Riverwood Capital wasn’t always Riverwood. The firm formed last year under the name “Bigwood Capital,” with co-founders Michael Marks, the former KKR partner and Flextronics CEO, and Christopher Varelas, the former co-global head of tech media and telecom investment banking for Citigroup. No word on the reason behind the name change.

Arlington Capital Partners officially launched fundraising on its third buyout fund yesterday, according to a source. As peHUB reported in September, the fund has a $750 million target. Credit Suisse is the firm's placement agent, which is notable since Arlington had used UBS for its prior funds, raising $452 million for its debut and $585 million for the follow-up. Part of that was because of the

NEW YORK (Reuters) – Lehman Brothers Holdings Inc. has reached an agreement in principle to sell its merchant banking business, made up of two private equity funds, to management of the funds, a source familiar with the situation said on Thursday. The business to be spun out would also take in new investment from South […]

Harvard, Columbia and University of Virginia don’t get to have all the fun. There’s another type of secondary sellers: Feeder funds. Plenty of the bulge bracket investment banks manage private equity funds-of-funds for their wealthy client investors, and those clients want out of their commitments. JP Morgan is one name rumored to be shopping a number of interests in private equity feeder funds. Lehman Brothers Neuberger Berman, is another. Lehman’s fund management business and its wealth management businesses are actually owned by different entities now—Neuberger manages the feeder funds, but Barclays has the wealth management operation.

Could 2009 be a rebound year for publicly-trade private equity firms? It wouldn’t seem to make much sense, but neither did the near-fatal beatings that some of these stocks took last year. So, with that in mind: Following the first five days of 2009 trading, most publicly-listed PE firms have experienced major stock bumps. The […]

Hispania Capital Partners has held a first close on over $105 million for its second fund, which is targeting between $150 million and $200 million. The Chicago-based firm focuses on lower-middle-market companies that provide goods and services to the Hispanic demographic in the U.S. and Puerto Rico. Limited partners include Verizon’s Pension Fund, the Municipal Employees' Annuity & Benefit Fund of Chicago, the Public School Teachers' Pension & Retirement Fund of Chicago, CalPERS, Credit Suisse’s Customized Fund Investment Group, the Connecticut Retirement Plans & Trust Funds and the New York City Employee Retirement System.

After the interest in our post about Cogent Partners’ secondaries pricing report, I spoke with one of its authors, Cogent managing director Colin McGrady, about some trends he’s seeing in the market. What’s the biggest concern for secondary sellers right now? Institutional investors are really concerned that once the buyout funds start to believe the environment is good to make investments, those capital calls will come fast and furious. It won’t be a normalized capital calls pace. There will be nothing in terms of liquidity, and they’ll have a big wall of capital calls that come. So, naturally, that’s affecting saturation on the secondary market. As people budget for the next fiscal year, nobody is expecting any liquidity. They’re looking at uncalled capital and saying, “We could have a serious problem here.” The easiest way to solve that is the secondary market. But for immature interests in mega-caps, there is no market for those. The big buyers in the secondary market say, “We got our fill of those in ’07 when they were raising them. (The mega-buyout funds) didn’t turn away any capital.”