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Private Equity Briefing - Archive | July, 2012

Private equity fundraising gets more crowded

Posted on 16 July 2012 by admin  |  Email |Print

The number of private equity funds seeking money from investors reached an all-time high in the second quarter, while those which completed fundraising hit a record low, according to data released by market research firm Preqin.
Tighter deal financing and an economic slowdown have made it more challenging for private equity fund managers to deliver outsized returns for investors, who have become more picky when it comes to tying up their money for an average of 10 years. ……………………………………….Full Article: Source

Private equity investment spree expected

Posted on 16 July 2012 by admin  |  Email |Print

The Middle East’s private equity funds, which have long lagged behind their global peers, have built up at least $5bn in capital ready to invest in new opportunities, industry leaders said this week. They will also increase endeavours to make new investments this year.
The so-called “dry powder” has been building for years, as private equity funds – which occupy a smaller segment of the financial sector than similar funds in the developed world – raised cash faster than they spent it. ……………………………………….Full Article: Source

In tough times, private equity saves jobs

Posted on 16 July 2012 by admin  |  Email |Print

According to a report by Moody’s Investors Service last week, workers would be wise to choose companies owned by private equity. Moody’s data shows that such companies are much less likely to be liquidated when the going gets tough. It turns out that private equity does more to save the jobs of workers at struggling companies than other types of owners do.
The Moody’s study reviewed more than a thousand situations going back to 1988 where companies defaulted on their debt. Two hundred involved companies that had undergone leveraged buyouts backed by private equity; the others had not. ……………………………………….Full Article: Source

Private equity goes prospecting in emerging markets

Posted on 16 July 2012 by admin  |  Email |Print

Somewhat insulated from the recession anxieties and sovereign debt default fears that gripped the developed markets, fast-growing emerging market economies from Asia to Latin America continued to beckon global private equity investors.
General partners (GPs) continued to flock to healthier macroeconomic climates and booming regions like Greater China, Southeast Asia, and the Indian subcontinent seeking investment opportunities……………………………………….Full Article: Source

Private equity mitigates Europe risk via refinancing, hedges

Posted on 06 July 2012 by admin  |  Email |Print

Private equity firms are gearing up for a possible deterioration of the sovereign debt crisis in Europe and an extended period of low economic growth, through a mixture of refinancing and hedges.
Making sure European investments stay in business while not jeopardizing returns by European nations’ onerous debt and austerity measures, along with slowing economic growth, has been in sharp focus of late for investment managers and their clients. ……………………………………….Full Article: Source

Asia Pacific private equity investors more pessimistic about India than their global counterparts

Posted on 06 July 2012 by admin  |  Email |Print

Asia Pacific Private equity investors are far more pessimistic about India than global investors, finds a global PE study by Coller Capital, a leading global investor in private equity secondaries, which publishes a Private Equity Global barometer annually.
As a buyout destination, within the Asia Pacific region, India is seen as far less attractive than China, or the favourite Australia. For venture capital growth over the next two years, however, India comes second as a favourite destination, behind China, with Indonesia as the only 3 countries that respondents expect growth in. ……………………………………….Full Article: Source

Middle East private equity in tough spot

Posted on 06 July 2012 by admin  |  Email |Print

The US$23.2 billion (Dh85.21bn) Middle Eastern private equity industry is struggling as fund-raising gets tougher and viable exit options diminish. About $700 million was raised last year, compared with more than $6bn at the industry’s peak in 2007, according to the Mena Private Equity Association’s annual report.
Funds under management grew to about $23.2bn last year from about $8bn in 2006, the report said. ……………………………………….Full Article: Source

Australia: Private equity’s healthy interest in health-care sector

Posted on 06 July 2012 by admin  |  Email |Print

Like many other developed countries, Australia faces an aging population, more obesity and higher cancer rates, and is spending more to tackle those problems. The government spent $5,479 per person on health care in the fiscal year that ended June 30, 2010, the latest figures available, up from $4,710 four years earlier.
That money is flowing to a wide range of health-care providers as the government turns to private companies to treat patients under Australia’s Medicare system. Genesis Care operates services for cancer and cardiovascular diseases in state-funded and private hospitals and seeks to benefit from the increased government spending. It plans to open more private clinics that offer quick access to treatment. ……………………………………….Full Article: Source

Islamic private equity investments in Malaysia to quadruple to US$3.1bln

Posted on 06 July 2012 by admin  |  Email |Print

Islamic private-equity investments are poised to quadruple in Malaysia to US$3.1bil (RM9.7bil) in five years on government incentives, according to the industry’s biggest fund manager.
CIMB Islamic Bank Bhd, which oversees RM1.7bil of funds that invest in unlisted companies, was handling more cash for state institutions and benefiting from tax exemptions on fees until 2016, Kuala Lumpur-based chief executive officer Badlisyah Abdul Ghani said in an interview. Syariah-compliant regulations and fund-raising options were developed enough to support growth in the market, which had about RM2.5bil in assets, he said. ……………………………………….Full Article: Source

China amends law to regulate private equity funds

Posted on 06 July 2012 by admin  |  Email |Print

China will amend its fund law to start regulating private equity funds, Xinhua News Agency said, citing Wu Xiaoling, vice chairman of the Financial and Economic Committee of the National People’s Congress.
A draft amendment has been submitted to NPC for review, Xinhua said. The amendment aims regulate all kinds of private equity funds and will allow them to invest in the shares of unlisted companies, according to the official news agency. ……………………………………….Full Article: Source

China may let asset managers invest some funds in private equity

Posted on 06 July 2012 by admin  |  Email |Print

China plans to allow asset management companies to invest in private equity with funds from their special-asset management units. The plan is meant to prompt private investment in unlisted companies’ stocks and debt, according to a statement posted on the China Securities Regulatory Commission’s website.
The nation plans to remove allocation restrictions for special accounts’ securities investments. The funds aren’t currently allowed to buy a single stock exceeding 20 percent of their planned net asset value or a single non-stock security exceeding 10 percent. ……………………………………….Full Article: Source

Is private equity ‘pretty terrific’ for society?

Posted on 06 July 2012 by admin  |  Email |Print

Blackstone Group chairman and CEO Steve Schwarzman told CNBC’s “Squawk Box” that the private equity industry’s leaders need to do a better job of marketing if they want to dispel popular misconceptions about what their firms do.
“What private equity does is raise money from pension funds – these represent policemen, firemen, teachers, corporate executives and state and municipal employees,” said Schwarzman, “and it invests that money to buy companies.” ……………………………………….Full Article: Source

Axa Private Equity to buy 11 fund investments from OMERS

Posted on 06 July 2012 by admin  |  Email |Print

Axa Private Equity, the investment arm of French insurance group Axa, said it would buy a portfolio of 11 private equity fund investments worth about $850 million from the private equity arm of Canadian pension fund OMERS.
The portfolio consists of buyout funds including North American and global funds, the companies said in a statement. “This is a large and significant transaction where we have excellent visibility on the assets, especially given that we are an existing investor in many of the funds,” Benoit Verbrugghe, Axa Private Equity’s head of North America said. ……………………………………….Full Article: Source

Blackrock buys private equity arm of Swiss Re

Posted on 06 July 2012 by admin  |  Email |Print

US investment manager BlackRock is buying Swiss Re’s European private equity arm, marking the second deal for a private equity fund manager in as many days as sellers contend with a new regulatory landscape and tough trading.
Swiss Re’s deal to sell its $7.5 billion private equity and infrastructure fund of funds business follows hot on the heels of HarbourVest Partners’ agreement to buy Amsterdam-listed private equity fund of funds business Conversus Capital. ……………………………………….Full Article: Source

Getty Images auction draws initial bids of around $4 bln

Posted on 06 July 2012 by admin  |  Email |Print

The auction for a potential sale of Getty Images Inc. has progressed to the second round, with several private-equity firms putting in initial bids of around $4 billion, people familiar with the matter said.
Buyout firms KKR & Co. and TPG are among at least five bidders that remain interested in privately-owned Getty, these people said. The Seattle-based photo agency distributes stock photographs, video footage and digital images to media and other organizations around the world. ……………………………………….Full Article: Source

Private equity firm H&F presses on with $4 bln Getty Images sale: sources

Posted on 06 July 2012 by admin  |  Email |Print

Private equity firm Hellman & Friedman LLC is pushing ahead with a $4 billion sale of Getty Images Inc, the largest supplier of stock photos, video and other digital content, to private equity, two people familiar with the matter said.
While several private equity firms, such as Bain Capital LLC, have balked at Hellman’s $3.5 billion to $4 billion price expectations, other buyout groups, including KKR & Co LP and TPG Capital LP, are still in the process, which is now in the second round, the sources said. ……………………………………….Full Article: Source

Wood Mackenzie sold to Hellman & Friedman for £1.1bln

Posted on 06 July 2012 by admin  |  Email |Print

Control of Wood Mackenzie, one of the Scotland’s oldest and most lauded companies, has been sold by Chartehouse to rival private equity group Hellman and Friedman, in a deal valuing the business at £1.1bn.
The deal, which will see Charterhouse retain a 13pc stake, leaving H&F with 63pc overall, will net the private equity group a good profit just three years after buying the company………………………………………..Full Article: Source

EB Private Equity bids $1.67 bln for David Jones

Posted on 06 July 2012 by admin  |  Email |Print

David Jones Ltd. said that a little-known private equity firm, EB Private Equity, had made a 1.65 billion Australian dollar (US$1.67 billion) takeover approach for the company, sending its shares surging.
The upmarket department store chain urged investors to be cautious about the approach and said it had limited information about the bidder or its funding capabilities. A spokeswoman for David Jones said the offer was received via email and did not contain a contact telephone number. “We have responded via email with a request for more information,” she said. ……………………………………….Full Article: Source

EverBank to buy GE Capital unit for $2.51 bln

Posted on 06 July 2012 by admin  |  Email |Print

Private equity-backed EverBank Financial Corp said it would buy GE Capital’s Business Property Lending Inc division for $2.51 billion to boost its ability to lend to small and mid-size companies, driving up its shares more than 4 percent.
EverBank, which went public in May and has a market value of about $1.3 billion, has used acquisitions to diversify its operations and increase its assets. The lender agreed to buy MetLife Inc’s warehouse finance business in February. ……………………………………….Full Article: Source

Carlyle’s Sunoco deal casts glow over private equity

Posted on 06 July 2012 by admin  |  Email |Print

Private-equity shops have been portrayed as villains this year in the run-up to the presidential election. But today, Carlyle is being cast something of an American hero in its deal to take over a Sunoco refinery in Philadelphia.
Republicans and Democrats alike have taken shots at the background of Mitt Romney, the presumed Republican candidate and the former head of Bain Capital. While Romney has touted his experience as a job creator, critics have tried to lambast the private-equity industry as job destroyers………………………………………..Full Article: Source

Private equity RRJ Capital raising US$5 bln for second Asia Fund; Secured $3bln already

Posted on 06 July 2012 by admin  |  Email |Print

Private-equity firm RRJ Capital Ltd. is raising $5 billion for its second Asia-focused fund, and has already secured more than $3 billion in commitments from investors, according to a person familiar with the matter. The fund is targeting a first-close of September, the person said.
Hong Kong and Singapore-based RRJ was started by Richard Ong, who formerly headed investment-banking at Goldman Sachs Group Inc. in Asia excluding Japan, before leaving in 2008 to found Chinese private-equity firm Hopu Investment Management Co. RRJ raised $2.3 billion in its first fund in March 2011, with investments focusing on the energy, resources, consumer and financial sector………………………………………..Full Article: Source

Zell said to seek $1 bln for new private-equity fund

Posted on 06 July 2012 by admin  |  Email |Print

Billionaire Sam Zell’s Equity Group Investments LLC is seeking $1 billion for its next distressed private-equity fund, said two people familiar with the matter.
Zell Opportunities Fund II LP will make distressed investments including asset acquisitions, secondary-market purchases and rescue capital for cash-strapped companies, according to the people, who asked not to be identified because the information isn’t public. ……………………………………….Full Article: Source

CapitaMalls Asia sets up $1.27bln China private equity fund

Posted on 06 July 2012 by admin  |  Email |Print

CapitaMalls Asia, the shopping malls arm of Singapore’s CapitaLand, said on Monday it has set up a US$1 billion (S$1.27 billion) closed-end private equity fund that will invest in Chinese malls.
Outside investors will take up half the capital in the CapitaMalls China Development Fund III, while a CapitaMalls unit will subscribe for the remaining 50 per cent. ……………………………………….Full Article: Source

A private equity fund with a 10pct dividend yield?

Posted on 06 July 2012 by admin  |  Email |Print

Compass Diversified Holdings (CODI) describes itself as “an acquirer, owner, and manager of high cash flow, niche leading middle market businesses operating in attractive industries.” CODI is thus essentially a public middle-market private equity fund.
The company has done a good job buying and selling businesses with realized gains of $198m on the five businesses CODI has sold since its IPO. Shareholders can profit from owning CODI not only because of its success at buying and selling companies but also from its strong dividend yield……………………………………….Full Article: Source

Middle Eastern private equity fund seen expanding in SE Asia

Posted on 06 July 2012 by admin  |  Email |Print

Abraaj Capital—a private equity fund that counts Middle East royal families and high net worth individuals and sovereign funds as investors—is exploring more investment opportunities in Southeast Asia, including the Philippines.
Abraaj Capital established its presence in Southeast Asia with the acquisition of Aureos Capital, which has become the platform for its investments in small and medium enterprises. ……………………………………….Full Article: Source

Gulf Capital named best private equity firm

Posted on 06 July 2012 by admin  |  Email |Print

Gulf Capital, a leading alternative investment firm, was awarded the “Best Private Equity Firm in the Middle East” title for the second year in a row at the Banker Middle East Industry Awards 2012 yesterday (June 12) in Dubai.
The awards extravaganza witnessed an attendance of eminent industry experts and dignitaries from the GCC, Levant and around the world including Dr Nasser H Saidi, chief economist of the Dubai International Financial Centre Authority (DIFCA) and board member of the Hawkamah-Institute for Corporate Governance at the Dubai International Financial Centre (DIFC). ……………………………………….Full Article: Source

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