Sex and the City had a lady lawyer as part of Carrie Bradshaw’s posse. The pilot for a new TV show called "Cashmere Mafia" by SATC creator Darren Star presents another fab four babes, including a Wall Street bank managing director….
Tags: investment banking
- Another American Real-Estate Bubble
- DE Shaw mulls new private equity fund
- Tide turns against short-sellers
- Global ‘Bache’ For Pru
That’s what the Financial TImes is suggesting after ABN Amro was successfully targetted by activist investors and forced to sell itself.
Senior Citigroup executives fear the world’s biggest financial services company could become the target of activist hedge funds that would press for it to be broken up.
The executives believe Citigroup needs to step up its investor relations and explain better to shareholders the value of keeping its businesses together.
Many have dismissed the possibility that Citigroup, valued at $260bn, could become an activist target. But one Citigroup executive said: “Even Citigroup is not too big. It’s not impossible.”
Everyone knows the story of how Michael Dell pioneered the direct-to-your-door computer sales model out of his college dorm room. Now back at the company’s helm after a hiatus, he’s thinking of finally looking to other channels to boost flagging sales. So what took them so long to lose their religion?
Dell Inc. founder and Chief Executive Michael Dell has informed employees of new plans to re-ignite growth at the big computer maker, after a recent meeting with the company’s overhauled executive team.
In an email sent to Dell’s world-wide staff on Wednesday, Mr. Dell outlined moves to reach more customers and make technology simpler for users. Mr. Dell wrote that the company needs to streamline its management structure to speed up decision making.
Tags: Dell
- BofA threatens legal action against ABN
- As Funds Leverage Up, Fears of Reckoning Rise
- Heard on the Street: Clean Books Bolster Traditional Lenders
- KKR bid team to pocket £60m in fees
- Deutsche Bank Hires Eight M&A, Equity Bankers in Asia
- More headlines below
Freddie Mac CEO expects subprime mortgage crisis to worsen Washington Mutual tightens mortgage lending How The Bad News Could Get Worse
Calling all activist investor hedge funds — The New York City Employees’ Retirement System and the Teachers’ Retirement System wants you! It’s looking for requests for qualifications (RFQ) to be submitted by May 30 for anyone interested in managing their money:
The RFQ defines activism as “investments in publicly-traded companies that are aimed at adding value or ‘alpha’ to a portfolio through proactive engagement of the management of each portfolio company. Goals of investing in activist funds include positive strategic, structural, operational, financial and/or governance improvements, which will be reflected positively over time in the company’s share price.”
The RFQ is open to U.S., non-U.S. or global equity strategies and the benchmark will vary depending on the strategy of the individual products. Interested firms should have at least $50 million in institutional activist investments under management and a two-year return composite for the proposed product; firms with longer records must provide that record since inception.
Tags: Hedge funds
Given the subprime lending and housing market messes, it’s not altogether surprising that homebuilders are facing some dicey finances. Moody’s says that some of them are in peril of violating their loan covenants as sales have fallen:
More than half, or 11, of the 21 builders that Moody’s rates failed to generate more cash than they spent in 2006, analyst Joseph Snider in New York said in a report today. Homebuilders often have to promise banks that they will have twice as much operating revenue as interest expenses over a given time or the bank can demand immediate repayment of a loan, Snider said.
The homebuilders’ situation is especially dire because cash flows usually turn positive during a slump as they cut back on starts and sell existing inventory, according to the analyst. The housing market is so weak that homebuilders haven’t been able to cut their inventories, leading many to ask their bankers for so- called covenant relief, Snider said in an interview. Ratings may also be in jeopardy, he said.
“The next year or so for them is going to be pretty grim,” Snider said. Some of the requests being asked of lenders are to relax rules that govern the amount of cash flow they must have in relation to interest expense.
Tags: Homebuilders
In its twice-yearly Financial Stability Review (FSR), the Bank says that while overall conditions remain favourable, the problems in the US sub-prime mortgages highlight what could go wrong here in the corporate credit market.
"The recent distress in the US sub-prime mortgage market provides a warning of how quickly credit quality can deteriorate following a period of lax credit standards," the report says. The Bank’s warning comes against a background of an increasing number of private equity purchases of big companies such as Alliance Boots bought with large amounts of borrowed money.
"Financial markets have continued to be vibrant, core institutions are highly profitable and the economic outlook is favourable. But risk-taking is increasing, including through higher leverage, lower margin requirements and relaxation of covenants," said Sir John Gieve, deputy governor, responsible for financial stability.
Tags: bonds, Distressed
John Mack, who’s a registered Republican been a big fund-raiser for that party, has picked his political horse, and she’s a Democrat whose name is Hillary Clinton according to BusinessWeek:
Mack previously reached Ranger status in Republican campaign finance circles by raising at least $200,000 for President George W. Bush’s reelection in 2004. (Former Goldman Sachs (GS ) CEO Hank Paulson, now U.S. Treasury Secretary, raised a Pioneer-worthy $100,000.) Mack, who says he’ll stay a registered Republican, was also considered a possible candidate for various Bush Administration posts over the years.
Steel Says Hedge-Fund Regulation Risks `Moral Hazard’ Citigroup seals $13.4bn takeover of Nikko CBOT expects review of ICE bid to be finished soon NYSE Euronext Profit More Than Doubles More headlines below
If they only had a brain: We’ve seen banks do a lot of really dumb deals in the past, and have been the happy beneficiary of some of their stupidity. Here’s another mind boggling example — bank debt with gutted or nonexistant covenants. How the guys at KKR must be howling with laughter at their good fortune:
The £11.1bn KKR-backed takeover of Alliance Boots is to be the first sizeable private equity transaction in Europe to make use of a "covenant lite" structure.
The controversial structure, increasingly popular in the US, sees debt providers cede almost all monitoring control to the equity providers.
It is likely to be the first of many private equity structures to use barely any banking covenants.
Up until now the only previous example of such a structure being put in place in a UK company was in Apax’s £675m purchase of Guardian Media Group’s stake in Trader Media.
Tags: Banks, Private equity
Pretty much anyone who’s been short so far in the subprime meltdown has been doing quite well. But the shorts aren’t the only ones. So who else is benefitting? Unsurprisingly, the lawyers. Some law firms have started up new groups focusing solely on subprime lenders as subprime firms, consumers and investors require advice on restructurings, bankruptcies, asset sales, lawsuits and possible regulatory scrutiny:
Dykema Gossett attorney Richard Gottlieb traveled last month to the lonely offices of an Irvine, Calif.-based subprime lender. A floor of the building that Gottlieb said buzzed with 150 analysts last year was now empty except for the conference room where he sat for a deposition with a client and other lawyers.
There are likely to be many attorneys wandering the desolate halls of cash-strapped subprime lenders in coming months as some companies in the industry confront a host of legal and financial challenges
Irvine-based New Century Financial Inc. filed for Chapter 11 bankruptcy protection this month, and Brea, Calif.-based Resmae Mortgage Corp. filed in February. In the wake of foreclosures and investment losses, federal agencies and at least six states have launched probes.
"This has had an industrywide impact," Gottlieb said in an interview from the Chicago office of Midwest firm Dykema Gossett. "Everyone is struggling; even if they were strong, they are struggling." In a clear sign of the growing demand, Pillsbury Winthrop Shaw Pittman announced last week that it has launched a new practice group focused on the legal issues surrounding the subprime mortgage market.
Tags: Lawyers
His Namibian extradition trial was supposed to have begun yesterday but was postponed to June 8.
Local media reports said the change was made at the request of prosecutors, who may be seeking a new judge.
It could be years before the fugitive former chief of Long Island’s Comverse Technology is extradited back to the U.S. – if he’s ever forced to return.
When he fled to the southwest Africa nation with his wife and their three kids in July, Alexander got a two-year work permit by pledging to invest $38 million in the country.
Since then, the Israeli tech entrepreneur, 54, has taken out full-page ads and erected billboards publicizing his commitment to his new found home.
Kobi Dodges Another Bullet – New York Post
Tags: Backdating, Kobi Alexander, Lawsuit
Morgan Stanley top prime broker in European hedge fund market Traders are advised to learn subprime lesson Barclays Probed by SEC Over Bankruptcy Conflicts Wall Street Japan: Merrill’s Deal For Part of Resona Makes History BlackRock, Goldman, Waddell Sell U.S. Stocks, Buy Europe, Asia More headlines below
Suddenly, Hedge Fund Fees Seem High Ex-Merrill Broker Denies Giving Clients `Squawk Box’ Access Carl Icahn: ISS recommends his election to Motorola’s board Glass Lewis rejects Icahn bid for Motorola board
Leon Black, founder of Apollo Management LP, said executives of the New York-based buyout firm were examining whether to sell shares to the public, a step being taken by rival Blackstone Group LP.
“We’re looking at this, as is every other private-equity fund,” Black, 55, said today during a panel discussion at the Milken Institute Global Conference in Beverly Hills, California. Any setback to equity markets, trading at record highs, would likely come from a “geopolitical” crisis, he said.
Apollo is also considering the private sale of shares, which would raise capital while avoiding the scrutiny that comes with an initial public offering, two people familiar with the talks said April 5. A private placement wouldn’t preclude an IPO, and would allow Apollo to gauge the success of Blackstone’s offering before going ahead with its own, they said.
Tags: Apollo, IPO, Leon Black
PADDLES!!! PADDLES!!!: Vonage, clinging to life, got a slim glimmer of hope from an Appeals Court judge that will allow them to continue to sign up new customers while it appeals a ruling that it violated Verizon patents:
Vonage Holdings Corp. won a court ruling allowing it to continue to sign up new customers while it appeals a previous court decision that it violated patents held by Verizon Communications Inc.
The U.S. Court of Appeals for the Federal Circuit issued Vonage a stay of the previous court’s injunction that would have barred it from signing up new customers throughout its appeal
Tags: Lawsuit
And they’re from Apple’s former CFO, Fred Anderson. Meanwhile, the SEC has closed their backdating probe into the firm.
According to the Wall Street Journal:
Apple Inc.’s former chief financial officer, in a striking public statement, asserted that Chief Executive Steve Jobs misled him about board actions on stock-options awards, and that he told Mr. Jobs the company might have to take a charge against earnings if it backdated stock-options grants — a charge it didn’t take.
The allegations by Fred Anderson, now a partner in a Silicon Valley private-equity firm, could complicate efforts by Mr. Jobs to stay above the options-backdating fray, which has swept up Apple and more than 140 other companies in federal investigations and forced about 80 corporate executives out of their jobs.
Tags: Apple, Backdating
Alpha Magazine’s list of the top 25 hedge fund earners is out for 2006. The average earnings over the whole group is a meager $570 million vs $362 million last year. Those earning less than $240 million in 2006 need not apply; that was the cutoff point vs $130 million in 2005. And as he topped last year’s list, James Simons of Renaissance Technologies Corp leads the pack with $1.7 billion.
No managers made more money than the triumvirate of James Simons of Renaissance Technologies Corp., Citadel Investment Group’s Kenneth Griffin and Edward Lampert of ESL Investments. Between them they earned an estimated $4.4 billion — more than all the 25 top-paid managers combined made in each of the first two years of our ranking. Keep in mind that Alpha uses two components to arrive at hedge fund managers’ earnings: the gains on their own capital in their funds and their share of their firm’s management and performance fees. Simons, Griffin and Lampert each have well over $1 billion of their own capital invested in their own funds.
Like Carnegie, Rockefeller and Vanderbilt before them, Alpha’s band of billion-dollar earners couldn’t be any more different from one another. Math whiz Simons, who made $1.7 billion to repeat as No. 1, has assembled an army of rocket scientists to build complex computer models that rapidly trade markets around the world, hoping to exploit tiny price changes. Griffin, No. 2 with $1.4 billion in earnings, has built a huge firm by hedge fund standards — Citadel has more than 1,000 employees — expanding into ancillary businesses like hedge fund administration and market making. Lampert, who made $1.3 billion in 2006 to finish at No. 3, has stashed the bulk of his assets in a single company — retailer Sears Holdings Corp., of which he is chairman.
Today’s hedge fund tycoons wield enormous power that goes well beyond the business world. Griffin and Steven Cohen, the founder of SAC Capital Advisors (and No. 5 on our list, with $900 million in earnings), are major forces in the art market, regularly ranked among the world’s ten biggest collectors, according to ARTnews magazine.
Here’s the full list of 25:
Tags: Avenue Investments, Bridgewater, Bruce Kovner, Carl Icahn, Caxton, Citadel, Dave Tepper, Eddie Lampert, George Soros, GLG Partners, Hedge funds, Och Ziff, Paul Tudor Jones, SAC Capital
RBS-Led Group Makes Offer for ABN Worth More Than $100 Billion Hedge funds lead European leveraged lending Fund Managers Give Hedgies Run for Money Carlyle’s Grady Says Venture Firms Struggle While Buyouts Boom Gradual opening for Spain’s hedge fund market More headlines below
First there was Aleksey Vayner, then there was AJ….now the New York Post presents the latest obnoxiously pompous, conspicuously consuming, dweeby junior banking type in a piece they call "Tools of the Trade" (maybe more appropriately entitled in his case: "Tools IN the Trade"). Meet Andrew, 24, who tells us he’s paid $190K "including projected bonus". The article shares the tools he uses in his day to day life, his grooming habits (which focus on shoe shining) and his tastes — he likes cigars and uses that nugget on his résumé because "liking cigars is a good talking point". (P.S. While the article doesn’t give Andrew’s full identity, a friend with Bear Stearns tells us that’s where he works and his full name is Andrew Caselli.)
This is some of what he wears:
Suit: Hickey Freeman suit, $2,749. "I have about 10 suits and usually buy them at Hickey Freeman and Paul Stuart. I have two really heavy pin-stripe suits that I’d classify as ‘power suits.’ Bankers never wear double-breasted suits, it’s a fashion faux pas. I get all of my suits tailored in Rochester, N.Y. There is a Romanian couple that have been doing my father’s suits for years. They are trusted in the family, and 10 times better than any of the tailors I’ve used in the city."
White shirt: "There’s a saying in the banking world that you can never have too many blue suits or white shirts. I get mine from Hickey Freeman [$149-$249] as my standby, but I also shop at Charles Tyrwhitt [$99-$200], Thomas Pink [$149-$249] and Turnbull and Asser [over $250]. I get my white shirts heavy-starched."
Collar: "I always buy cutaway collars and French cuffs from the British stores (Tyrwhitt, Pink, Turnbull & Asser), and Barrel (button) cuffs from Hickey Freeman."
Watch: Breitling Navitimer, $5,299. "Bankers have a complex with having a watch. Far and beyond the most popular watch is a Rolex Submariner – black or white face, half bezel is blue. The Navitimer comes in a few different sizes and shapes."
Shoes: Ferragamo loafers, $395 at Saks Fifth Avenue. "The standard banker shoe is a fashion loafer or a tie cap toe."
Tags: Blackberry, Fashion, investment banking, NY Lifestyle
Bondholders could be under water by the billions in the subprime meltdown according to Pacific Investment Management:
They will lose as much as $75 billion on securities made up of millions of mortgages to people with poor credit, says Pacific Investment Management Co., manager of the world’s biggest bond fund. Some of the $450 billion in subprime mortgage-backed debt sold last year has lost 37 percent, according to Merrill Lynch & Co.
BlackRock Inc., AllianceBernstein Holding LP and Franklin Templeton Investments are vulnerable because investors have replaced banks and thrifts as the primary source of money for U.S. mortgages. More than $6 trillion of mortgage bonds are outstanding, dwarfing the amount of U.S. government debt by about 50 percent.
“Bond investors will be the ones who will take the losses,” not the banks, said Scott Simon, who oversees $250 billion in asset-backed securities at Newport Beach, California- based Pimco, a unit of insurer Allianz SE in Munich.
So what’s the still-holed-up-in-his-Namibian-haven fugitive Kobi Alexander up to these days? The NY Post tells us that he’s been busily trying to make himself look good to the Namibian locals by pumping money into their economy before his extradition trial begins tomorrow. Alexander, out on bail, was arrested in August after a two month international manhunt.
The fugitive former chief of Long Island’s Comverse Technology is setting up a scholarship fund in his newly adopted home of Namibia – an apparent bid to curry favor with local authorities just days ahead of the start of his extradition hearing.
Jacob "Kobi" Alexander, who fled the U.S. last summer to avoid facing charges after he allegedly pocketed millions in ill-gotten gains in a stock-option scheme, is pledging $150 million in Namibian currency – the equivalent of about $21,300 U.S. – each year to encourage top students to further their studies in science and technology.
Since settling in the African nation with his wife and kids last summer, the alleged securities scamster has promised to pump money into the Namibian economy, including the construction of 200 homes for low-income residents.
Fugitive ‘Kobi’ As Namibia Nurturer - New York Post
Morrellwine.com – 1 Rockefeller Plaza NYC
Tags: Backdating, Kobi Alexander, Legal
Goldman Sachs has beaten Blackstone to the punch at raising a $20 billion LBO fund. So far Blackstone has raised only a meager $18.1 billion in commitments:
The new GS Capital Partners fund took in more than double the $8.5 billion Goldman raised for its fifth fund in 2005, according to an e-mailed statement today. The new pool includes $11 billion from institutional clients and wealthy individuals and $9 billion from Goldman and its employees — more than triple the $2.5 billion contributed by the firm for the last fund.
“My guess is you will see someone in the next 12 months try to top this Goldman deal,” said Colin Blaydon, director of the Center for Private Equity at Dartmouth College’s Tuck School of Business in Hanover, New Hampshire. “When the cookies are being passed around you’d better take some, because you don’t know when they’re coming back around again.”
Goldman Raises $20 Billion Fund Ahead of Blackstone – Bloomberg
Morrellwine.com – 1 Rockefeller Plaza NYC
Tags: Blackstone, Goldman Sachs, Private equity
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