Private Equity Info Blog

Private Equity Info (www.PrivateEquityInfo.com) expands data views by allowing Platinum subscribers to view the portfolio company holdings of the individual private equity firms.

Private Equity Info (www.PrivateEquityInfo.com) expands its data offering by tracking portfolio company transaction dates, exit dates and transaction comments for the portfolio companies owned by private equity firms.

Why is this interesting?

Suppose you wanted a list of portfolio companies that are owned by a private equity firm, located in your state, that have been held by the private equity firm for more than 4 years… or for more than 2 years but less than 5 years. You can now perform those searches.

Private Equity Info (www.PrivateEquityInfo.com) now offers subscribers the ability to download search results.

The “Download Results” feature is only available to our Platinum subscribers.

Private Equity Info (www.PrivateEquityInfo.com) has launched a new data module of Public Companies.

The new public company data module allows subscribers to keyword search the business profiles of the largest 4,000 publicly traded companies on the NYSE, NASDAQ and AMEX exchanges.

The key benefit of the keyword search is the ability to quickly find those firms that present a match for a very targeted search term. Why search by SIC, NAICS or other industry codes when you can search on exactly the terms that interest you?

Access to the Public Company data module is only available to Platinum level subscribers.

Private Equity Info (www.PrivateEquityInfo.c0m) announces data and search functionality expansions with a new Platinum subscription option.

Exclusive Platinum Subscription Features:

• Download Search Results (NEW!)
• Filter Private Equity Portfolio Companies by Investment Date (NEW!)
• View Private Equity Portfolio Transaction Comments (NEW!)
• View Each Private Equity Firm’s Portfolio Holdings (NEW!)
• Search Public Companies (NEW!)
• Search Senior Lenders
• Access to the Bronze, Silver and Gold Level Data Modules, including:

- Private Equity Firms
- Hedge Funds
- Mezzanine Investors
- Small Business Investment Companies
- Valuation Firms
- M&A Advisory Firms
- Institutional Real Estate Investors

Private Equity Info has upgraded its website with a more intuitive navigation, better visual appeal and faster load times.

A subscription to www.PrivateEquityInfo.com provides access to the entire data suite which consists of eight data modules:

• Private equity
• Hedge funds
• Mezzanine
• Small business investment companies
• Valuation
• M&A advisory
• Senior lenders
• Institutional real estate investors

Yesterday, The House Financial Services Committee passed H.R. 3818, the Private Fund Investment Advisers Registration Act.

H.R. 3818 passed by a vote of 67-1 and was introduced by Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

H.R. 3818 would amend the Investment Advisers Act of 1940 and place new registration and reporting requirements on hedge funds, private equity firms, single-family offices, and other private pools of capital. The bill, however, does exempt funds of less than $150 million (previously $30 million).

Although this new piece of legislation garnered early bipartisan support, it is is still pending a House floor vote.

The Committee is expected to vote on additional pieces of legislation such as H.R. 3817, the Investor Protection Act and H.R. 3890, the Accountability and Transparency in Rating Agencies Act later today.

Bulge-bracket is a term used in corporate finance to describe the largest and often most prestigious investment banks. Although there is no strict metric for this classification, bulge-bracket investment banks typically represent clients with transaction values in excess of $50 million. [NOTE: www.PrivateEquityInfo.com segregates investment banking firms by the enterprise value of the firms’ typical clients. See Corporate Finance Firms article for further details].

Prior to the 2007-2008 sub prime mortgage crisis, bulge-bracket firms dominated Wall Street. However, many of the largest investment banks were highly leveraged, having borrowed sums of money that were too large relative to their cash or equity capital. This borrowing essentially leverages (amplifies) a firm’s  returns (up or down), making the firms particularly vulnerable to market movements. The sub prime crisis, therefore had far reaching effects and served as a cleansing of sorts for the financial markets. As the value of mortgage-backed securities in the investment banks’ leveraged portfolios declined, so did the banks’ solvency, which begs the questions: “What happened to the Bulge Bracket firms and where are they now?”

During the sub prime mortgage crisis, major financial institutions failed, merged or were bailed out by governments. Here’s what happened to the five largest U.S. investment banks (not in order of size):

• Lehman Brothers: went bankrupt
• Bear Stearns: taken over by JPMorgan Chase
• Merrill Lynch: taken over by Bank of America
• Goldman Sachs: bailed-out by the U.S. government
• Morgan Stanley: bailed-out by the U.S. government

Visit www.privateequityinfo.com/advisory-firms.php to learn more about our database of bulge bracket investment banks, middle market investment banks and business brokers. The directory is comprehensive, up-to-date and includes fully-searchable key executive biographies for each firm.

For each fund under management, private equity firms cycle through a multi-staged process of:

• Fund raising from limited partners
• Portfolio acquisition search
• Investment
• Growth
• Divestment
• Dispersal of funds back to limited partners

Fund Raising

Most private equity firms raise capital for a fund through investments made by limited partners - typically pensions, endowments, institutional funds, and high net worth individuals - with the private equity firm serving as the general partner.

Prior to a capital raise, private equity firms normally establish a target fund size. Depending on the firm’s track record and the general economic climate, fund raising efforts may either be under- or over-subscribed. New funds for historically successful private equity firms are commonly over-subscribed and may therefore close with capital in excess of the target fund size.

Acquisition Search

Once fund raising is complete, private equity firms begin scouting for potential portfolio investments. While private equity firms enjoy meeting directly with companies interested in selling, often the introduction between a company and a private equity firm is made through an investment banker. www.PrivateEquityInfo.com provides corporate executives, business owners and investment bankers with the ideal information resource to quickly identify those private equity firms that might have an interest in their (or their clients’) company.

Investment in Portfolio Companies
As private equity firms identify potential portfolio companies in which to invest, they go through a merger & acquisition transaction process to acquire these new portfolio companies.

Corporate Growth

Private equity firms will often have a fairly aggressive growth strategy - for both organic and growth by add-on acquisitions - as a means to create value and therefore enhance the valuation of their portfolio.

Divestment - Liquidity Event

Because limited partners do not have an infinite investment horizon, private equity firms must eventually convert equity value back to cash by liquidating portfolio holdings. A divestment could occur in the form of a buyout, initial public offering (IPO), strategic acquisition, or another private equity firm buying the portfolio investment. Regardless of how it transpires, the divestment of a portfolio company creates a liquidity event for the private equity firm, essentially converting equity into cash or more cash-like equivalents.

Capital Gains

Private equity firms make money both from the cash flow that a portfolio company produces while it is owned by the private equity firm as well as from the capital gains realized upon exit. The liquidity event at exit produces and finalizes a capital gain (or loss) for the partnership for that particular investment.

Dispersal of Funds

The dispersal of the capital gain (or loss) from the fund to the limited partners provides the limited partners with a definitive return on investment for the life of the fund.

Next Fund

Long before a private equity firm finalizes its dealings with a particular fund, the PE firm begins the process of raising money for the next fund. In fact, it’s not uncommon for a successor fund within a private equity firm to purchase some lingering portfolio holdings from a prior fund.

Private Equity Info provides a comprehensive database of private equity firms, their investment interests, acquisition criteria, transaction types, portfolio companies and professional biographies. Plus, view other related firms such as hedge funds, mezzanine investors, small business investment companies, valuation service providers, investment banks, institutional real estate investors and senior lenders.

Mezzanine debt is subordinated debt that ranks between senior debt and equity. It is often a more expensive form of financing because it is unsecured (requiring no collateral) and subordinates to senior debt in case of a default.

Mezzanine debt can be used for a variety of purposes, but is generally used in corporate finance deals for growth capital and acquisitions.

Private Equity Info allows you to search the universe of U.S. mezzanine firms by state or alphabetically and view their contact information. You will also be able to keyword search the professional biographies of mezzanine investor executives to quickly determine the right person to approach at a particular firm.