on the map
So much more fun than a whiteboard video! The Private Equity Capital Growth Council, the buyout industry lobbying group that spent the summer bestowing upon the Internets a series of animated explainers, released an interactive map that’s pretty cool.
The map will tell you, for instance, that the New York State and Local Retirement System socked $14.9 billion of its $147.2 billion in investment dollars into private equity funds last year. You could have dug up that data on your own, but PECGC compiled the same data from the two biggest pension funds in each of the 50 state for which such data was available, and pulled together a handy ranking:
We occasionally wonder why more of the conversation about the outsized incomes earned by successful hedge fund and private equity managers doesn’t touch on the clients footing the bill. Which is to say, before you complain about how much money managers make, it’s worth remembering that institutional investors—pension funds, university endowments, etc.—pay managers to invest institutions’ money.
Well, in case you didn’t realize or somehow forgot who private equity firms work for, an industry lobbying group is here say they work for you: “The vast majority of the firms’ returns go directly to the firms’ investors,” says the narrator of an animated web video published today by the Private Equity Growth Capital Council. “So when private equity succeeds, public school teachers in Michigan, police and firefighters in Colorado, nurses in Ohio and college students in North Carolina reap the benefits.”
If you missed it over the weekend, New York Attorney General Eric Schneiderman is investigating the tax practices of private equity firms. At the center of the inquiry is the practice of converting management fees into investments that are taxed at more favorable rates. The private equity industry says such conversions are widely practiced and accepted; here’s a tax lawyer who says they’re illegal.
1 percent problems: Steven M. Davidoff digs into reports on private equity and finds an industry in transition: Private equity’s share of takeover deals more than halved last year compared against the first six months of 2007, and the industry is sitting on more than $900 billion in dry powder, which—along with cash-flush Read More
Losses mount: Tack on another $1 billion to the $2 billion-plus in trading losses JPMorgan disclosed a week ago today, says Dealbook, as hedge funds and other investors—knowing that Jamie Dimon’s firm is under pressure to sell out from under the losing bet—continue to prey on the firm’s huge, illiquid position.
Before Bruno Read More
One of the keys to Blackstone real estate wizard Jonathan Gray‘s success has been his and the firm’s first mover advantage, launching a real estate fund early on and innovating along the way. It took nearly two decades, but almost everyone else in the private equity business has finally taken note and is flooding the market. Whether they can ever overtake Blackstone is another matter.
While The Observer was off writing our cover story on Blackstone real estate wizard Jonathan Gray, he was plenty busy himself, working out a deal to buy a bunch of Merrill’s old commercial real estate, which are now controlled by Bank of America.
initial public offerings
In February 2007, Sam Zell told Jonathan Gray to buy a motorcycle.
Mr. Gray, head of the real estate division at private equity powerhouse Blackstone Group, had just closed on the purchase of Mr. Zell’s Equity Office Properties. Blackstone had announced its bid the previous November, just 13 months after Mr. Gray had stepped into his new role. He had spent his entire career at the firm, so his ascent was not so surprising, and had managed 10 deals worth a combined $32 billion so far, so the territory was not exactly new. All the same, Mr. Gray was 37 years old at the time, and he had embarked on the largest leveraged buyout in history.
On Jan. 18, less than a month before the deal was to close, Vornado Realty and two backers launched an unsolicited bid. It was $52 a share to Blackstone’s $48.50. Steve Roth, the bullish—in outlook, demeanor and build—chairman of the massive New York-based investment trust had arrived in the bookish Mr. Gray’s china shop, and it was now a scramble to fend him off.
Amid broader questions about the vitality of the current market for initial public offerings, Reuters’ Felix Salmon reports from the DLD conference in Munich that New York technology executives and pundits are less than optimistic about companies’ desire to get listed on stock exchanges.
Chief among the IPO bears was SecondMarket CEO Barry Read More
This year, several big initial public offerings appear ready to trundle down the pike, and business is bigger than it’s been in years.
Nielsen Holdings, Demand Media and (eventually) Facebook are set to rekindle the market. But, as The Wall Street Journal reports, returns for private equity firms will probably be hamstrung by Read More