Davos 2009: Rubenstein Says Buyout Financing May Resume by Year End

From the ongoing World Economic Forum in Davos, Switzerland here’s David Rubenstein, co-founder of the Carlyle Group, talking to Bloomberg’s Erik Schatzker about the outlook for Private Equity dealmaking in 2009:

KPS Capital Partners’ David Shapiro on Distressed Investing

While many in the distressed investing community were forced to play the part of a wall-flower over the past few years as their counterparts in the buyout business made deal after deal after deal, they’re now finding it’s their turn to dance.  Here’s KPS Capital Partners LP’s David Shapiro, one of the panelists’ at The Deal’s recent Distressed Investing Conference, discussing how now is the time to invest in distressed companies:

Venture Capitalist Confidence at an All-Time Low

If the venture capitalists of the Silicon Valley act as a bellwether for the venture community in the U.S. and the globe, then the latest Silicon Valley Venture Capitalist Confidence Index shows that VCs the world over are not happy campers of late. The index for Q4 2008, based on a January 2009 survey of 33 San Francisco Bay Area venture capitalists, registered 2.77 on a 5 point scale (with 5 indicating high confidence and 1 indicating low confidence), it’s lowest score ever.  The intent of the index is to measure and report the opinions of professional venture capitalists in their estimation of the high-growth venture entrepreneurial environment in the San Francisco Bay Area over the next 6 to 18 months.  

The index reached it’s highest point in the second quarter of 2007, unsurprisingly when times were good and the credit crunch was not yet in a reality.  However, the 6 to 18 months following Q2 ‘07 were anything but spectacular for the VC community which goes to show that the level of confidence at a given moment isn’t always an accurate portent of things to come.

The index is compiled by Mark Cannice at the University of San Francisco’s School of Business and Management.

Davos 2009: Weil Says `Tremendous Deals’ Await LBO Firms With Money

The current economic crisis (I must admit that La crise has a bit more of that dramatic gaullic flair to it, especially when the panic mongering television hosts in France try to connect it with all the ills of the world) has led to a boom for consultancy and advisory services for the finance sector.  Here’s Mark Weil, head of financial services for the Europe, Middle East and Africa region at Oliver Wyman, talking with Bloomberg’s Francine Lacqua about the global banking crisis and outlook for private equity firms:

Davos 2009: Quarta Says Era of Private Equity `Mega Deals’ Is Over

First off, Bloomberg has been doing a great job of covering the Davos Ski Weekend ‘09.  I tip my well insulated hat to them.  Here’s Roberto Quarta, a partner at Clayton, Dubilier & Rice Inc., in a interview with Bloomberg’s John Dawson about the outlook for the private equity industry for the foreseeable future:

HEC Alums Girszyn and Savinelli Leave 3i

HEC alumni Jérôme Girszyn and Laurent Savinelli, two partners in 3i’s Paris office, have left the firm.  Savinelli has managed the Growth Capital and SMBO team in France since 2002. He started his career as a financial analyst at stockbroker Oddo-Pinatton in 1989 before joining 3i in 1994. Girszyn joined 3i’s Paris office in 1998 from Arthur Andersen Corporate Recovery. He was appointed head of the portfolio team in 2000 and partner in 2003.

In somewhat related news, the head of 3i, Philip Yea, hinted at the possibility of raising a growth capital fun, along with repeating the mantra that cash is king.

David Rubinstein and Stephen Schwarzman in Happier Times

As a break from the doom and gloom of all the recent reports on Private Equity here’s a video from back when leverage was easy and convenant lite’s were all the rage:

• David Rubinstein and Stephen Schwarzman on the Charlie Rose Show hosted by Maria Bartiromo

Q4 2008 unquote” European Private Equity Barometer

The unquote” Q4 2008 Private Equity Barometer sponsored by Candover is out, and as expected, the news is not much different than the unquote”/Bridgepoint report on 2008 European buyout market.  

Total value of European private equity-backed transactions in the final quarter of 2008 dropped to €8 billion, a 59% decline from Q3.  It is also the lowest quarterly value since Q2 1997.

Q4 was merely the cherry on top of a very sour cake that was 2008 as final year figures for the total private equity market in Europe showed a remarkable drop in value, with 2008’s total of  €87 billion representing a near 59% decline against the record total of €198 billion in deals seen in ‘07. 

The barometer shows that buyout values in the quarter fell further, by 61%, which also happens to be how far European buyout values plummeted for the full year to a grand total of €73 billion.

Here’s the barometer to read:

• Q4 2008 unquote” European Private Equity Barometer (Sponsored by Candover) – January 22nd, 2008

Moulton Predicts a Third of UK Portfolio Firms Could Default

At the latest LSE AIC (nice event as always), Jon Moulton, head of Alchemy Partners and one of the most entertaining guys in the business to listen to, predicted that a third of companies owned by UK mid-market private equity groups could default on their debts over the next couple of years.  This is not really news as many have already said the same thing.  What could be interesting is to see if his dire prediction actually is lower than the what the end number in the UK actually turns out to be.  

Along these lines, Cognetas is in talks with lenders about restructuring the debts at four of its portfolio companies, this coming after it lost control of two investments last year.  The FT’s reporting the four companies are SGD, a French glassmaker; Covenant Healthcare, a UK plastic surgery group; Novus, a UK pub operator; and CPI, a French printer.  

A Moment to Pause and Watch the Inauguration

No matter where you live or what your political leanings are, this is one of those rare events that you’ll remember for a lifetime:

 

• Inaugural Address Transcript

…we can contemplate the possible coming changes to the capital gains tax another day.