A bunch of publicly traded funds of funds have released Sept. 30 valuation reports, with generally favorable results thanks to a better stock market, but no big rush to restart investment.
These firms may not be on the John Mayer level of celebrity status, but they can provide a look into broader trends. And while their shares trade in Europe, these companies invest in many U.S. buyout funds.
NB Equity Partners, which saw a 1.5% increase in net asset value per share during the month, singled out $4.9 million of positive mark-to-market adjustments on credit-related fund investments. NB also saw some unrealized gains on public equity securities.
HarbourVest Global Private Equity Ltd. said net asset value per share increased 0.9%. The firm said it benefited from the September sale of “a number of portfolio companies” and said the IPOs of A123 Systems Inc. and Select Medical Corp. could provide proceeds in the medium term.
Two entities managed by Partners Group also posted increases in NAV per share. Partners Group Global Opportunities saw a 6.5% increase during the month, thanks to favorable reassessments in its portfolio, while Princess Private Equity rose 1.8% amid “positive valuation developments.” Partners Group co-founder Urs Wietlisbach said in the PGGO press release that “we are currently seeing an increase in public comparables due to the positive momentum in equity markets, which led to significant write-ups in some of our direct holdings.” Both Partners funds would have seen bigger improvements without the currency issues that hurt the values of dollar-denominated investments.
Conversus Capital LP reported a 3.8% increase in net asset value per unit to $21.56 as of Sept. 30, up from $21.18 a month earlier. For the third quarter overall, the firm had net unrealized gains of $45.4 million and realized gains of $21.7 million. “By the end of the third quarter, new private equity investment activity appeared to be increasing,” Conversus said, also noting that “there were clear signs of life in the bank lending market, complementing the healthy high-yield bond market.”
Still, Conversus is sticking to its “realization strategy” enacted earlier this year, making no new commitments. NB Private Equity and HarbourVest also stated they made no new commitments in September.
We had a pretty wild morning today which started off with about 1% gains in the first half hour but a rally in the dollar caused a sharp reversal in stocks. Those gains quickly turned to losses and that was about all she wrote for the day. The S&P 500, Russell 2000 and Dow lost just over 1% today. Even worse, they're starting to show some technical damage. I wrote about how I felt like the indices were masking some deterioration in leading stocks and it looks like that game is coming to an end. The small caps continue to look the worst. The Russell 2000 broke its March trendline on Friday and closed below its 50-day moving average today. To top it off, it's not far from breaking the October low which would confirm a double-top.
The transportation index is also in danger of confirming a double top. Followers of Dow Theory would say that doesn't bode well for the broader market.
The S&P is a couple of days behind the Russell. It's now threatening its March trendline and is one bad day away from its 50-day moving average. It also dropped back under its September highs today, so that 1070 - 1075 zone may have flipped back to resistance from support.
It's no surprise that the Nasdaq is showing the most resilience with the recent impressive moves by the likes of AAPL, AMZN and GOOG. But if the broader market really starts sliding those stocks could see some sharp reversals and take the Nasdaq with it.
The Russell 2000 closed a little bit below its 50-day moving average so I'm setting its intermediate trend to lateral.
|Trend||Nasdaq||S&P 500||Russell 2000|
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Integrated A/V Systems LLC, a Houston-based portfolio company of Rock Hill Capital Group, has acquired a majority stake in Creative Presentations Inc., a New Orleans-based A/V integrator. No financial terms were disclosed.
Rock Hill Capital Group (“Rock Hill”), a Houston-based private equity firm, today announced that one of its portfolio companies, Integrated A/V Systems, LLC (“Integrated A/V”), also headquartered in Houston, has successfully completed the acquisition of a majority interest in Creative Presentations, Inc. (“Creative Presentations”) headquartered in New Orleans, Louisiana.
Integrated A/V (d/b/a CCS Presentation Systems Texas) is a leading full service integration and value added reseller of audio and video equipment including interactive whiteboards, projectors, LCD and plasma displays, audio systems, and document cameras. Integrated A/V serves customers in the corporate, government and educational institutions (higher education and K-12). With the acquisition of Creative Presentations, Integrated A/V will have offices in Texas: Houston, Dallas, Austin, San Antonio and Tyler and Louisiana: Lafayette and New Orleans.
Creative Presentations was founded by Barry and Susan Edwards and is the largest independent A/V integrator in Louisiana. With customers ranging from the Louisiana Department of Transportation, Governor’s Office of Homeland Security and Louisiana State University in Baton Rouge, Creative Presentations has a solid business model that will meld seamlessly with Integrated A/V’s current business.
Randall B. Hale, Managing Director of Rock Hill, stated, “We are pleased that Barry and Susan Edwards and the team at Creative Presentations agreed to partner with us and Integrated A/V. Creative Presentations represents an excellent expansion opportunity for Integrated A/V and a nice complement to our existing business.”
Mark Kalinsky, CEO of Integrated A/V, added, “We are proud to add the talent and extensive industry experience of Creative Presentations to our team. The demand for A/V technology has never been bigger and we saw a great opportunity to grow the business in the southeast by joining forces with the Creative Presentations team in Louisiana.”
Rock Hill and Integrated A/V continue to seek targeted acquisitions and growth opportunities in select markets throughout the United States.
About Rock Hill Capital Group
Founded in 2007, Rock Hill Capital Group, LLC (www.rockhillcap.com) is a private equity investment firm that targets investments in the growing middle to lower middle market companies with enterprise values of up to $75 million. Rock Hill seeks to assist successful entrepreneurial companies located in the southern United States in the growth and expansion of their businesses. Currently, Rock Hill has $50 million of committed capital under management through Rock Hill Capital I, L.P. Current portfolio companies include Integrated AV Systems, LLC d/b/a CCS Presentation Systems (www.ccsprojects.com) and SouthWaste Holdings, LLC (www.southwaste.com).
How is this possible: The decade or so leading up to the financial crisis saw the size of the nation’s banks increase dramatically. And in the wake of Lehman, there have been no shortage of critics of these too-big-to-fail banks. Yet 12 months later, the surviving firms are bigger and arguably more powerful than ever. How did this happen? “The simple answer is that the combination of a series of mergers in the industry and the disappearance of competitors like Lehman left those institutions that were still standing in much better shape than before. One way the government tried to stabilize the financial system was by allowing (or, in some cases, encouraging) bigger banks to take over their weaker brethren, with JPMorgan acquiring Washington Mutual and Bear Stearns, Wells Fargo acquiring Wachovia, and Bank of America merging with Merrill Lynch. In effect, weve made institutions that were already too big to fail even bigger,” writes James Surowiecki.
On a cold streak: When billionaire investor Carl Icahn agitated for a seat on Yahoo’s board, the Internet giant pointed to his track record of frequently getting into money losing situations. Now that he is stepping down from Yahoo’s board, Silicon Alley Insider takes the opportunity to look at some of his recent investments. How have they performed? From Motorola to BlockBuster to Yahoo, the answer: Not well.
Lunch time: Tech stocks are up nearly 60% this year and a spate of tech deals has given hope to a recovery in the M&A market. Our colleagues over at Barron’s take a look at the tastiest takeover targets as the tech-sector. The list includes such names as Brocade Communications, Juniper and Red Hat Who is Barron’s top target?
PE boom? Not anytime soon: PeHUB reports on a new PE survey from BDO Seidman. The findings? Deal flow should rise but not explode in 2010, 93% of PE pros surveyed reported headcount reductions at their portfolio companies, 81% have renegotiated debt and 83% have reassessed their market strategy.
Vampire squids: Goldman Sachs has drawn plenty of unwanted attention lately. And now protesters are picking the firm and home of its CEO. There is one group that might be benefiting from all this. “The crucial squid-puppet manufacturing sector,” writes Justin Fox over at the Curious Capitalist. By the way, has any phrase gone from novel to cliche faster than “great vampire squid wrapped around the face of humanity.”
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing."
--Former Citigroup CEO Charles Prince (from an exclusive July 2007 Financial Times interview)
After trillions of dollars of losses, the near seizing up of the global financial system, a degree of taxpayer support for and government intervention in the banking sector and other parts of the economy that is unprecedented, and a growing public backlash against Wall Street and the wealthy, you would have thought that those who created the mess we are in would have changed their tune, or at the very least, acknowledged that it was time to reconsider old, bad habits. On the contrary, if the following Reuters report, "Noyer Warns Banks on Excessive Risk," is anything to go by, it appears that the merchants of financial mayhem are up out of their seats, dancing again:
European Central Bank Governing Council member Christian Noyer warned that banks are taking the same risks that led to the financial crisis and said they should preserve capital rather than pay it out to bankers and investors.
His comments came as regulators around the world mull reforms to lower the risks that large banks can pose to the financial system and rein in the type of recklessness that fueled the credit crisis.
Noyer said impressive bank profits in recent weeks were a result of public policies to combat the crisis, and did not mean the industry had recovered its balance or that further reforms were not necessary.
"Nothing could be further from the truth. Indeed, one major risk in the period to come is the emergence of a business as usual mentality," Noyer said in a speech at a financial conference in Singapore on Monday.
"There are signs that parts of the financial industry have resumed risk taking practices reminiscent of those which led to the crisis," he said, pointing to bankers' pay packages that appeared out of line with performance.
Recent news that Goldman Sachs had set aside $16.8 billion to pay staff, so soon after repaying $10 billion in taxpayer money, fueled concerns that Wall Street is returning to practices commonplace before the crisis.
BANKS NEED TO BOOST BOOKS
Noyer, who is also the head of France's central bank, said the global economy has stabilized and the worst had been avoided. But he noted that bank credit to businesses, especially small and medium sized companies, was faltering.
"Most of the negative effects of the economic downturn on balance sheets are still to come," he said. "Efforts toward long term reform must not create, in the short run, additional downside risks to economic activity."
Noyer said banks in the long run needed to be robust and better capitalized, and in the short term should hang on to profits to strengthen balance sheets and finance credit.
"This would require some restraint in dividend distribution and of course in the overall amount of variable compensation," he said. "In parallel, all possibilities to issue new equity should be exploited."
U.S. Federal Reserve Chairman Ben Bernanke said last week that requiring big banks to hold more capital was under consideration.
Noyer said as a result of the crisis the financial system will be permanently changed, but the details were still up for discussion.
"We don't know yet what kind of financial system will emerge from the crisis. We need to think about this."
Filed under: Financial CrisisLike many other global financial institutions, ING Groep NV (NYSE: ING) got emergency government funding a year ago -- to stave off the financial chaos. The loan amounted to about 10 billion euros.
But, according to the European Union, it appears that the assistance was a bit too generous. As a result, the powerful organization has pressured ING to start to pay back the loans.Permalink | Email this | Comments
The McGraw-Hill Companies (NYSE: MHP), a distributor of business information and educational materials which counts Scholastic (NASDAQ: SCHL) as a related stock, issued third-quarter results earlier today. Sales contracted over 8%. Net income on a dollar basis dropped almost 14%. Earnings per diluted share decreased a very unlucky 13% to $1.07. At least expectations were taken out. Earnings.com indicates a beat of two pennies for per-share profit.
The declines are pretty understandable. When you think about McGraw-Hill, you understand fairly quickly that the company's business model is tied closely to the economy. Education markets must be tough given all the budget cuts happening in school systems across the country. Plus, spending by administrators is probably done these days very slowly and carefully.Read | Read | Permalink | Email this | Comments