Australian Dollar, Retail Stocks Rise

Australian retail stocks edged higher after the latest minutes of meetings from the RBA suggested that rates may not be raised at the next meeting. Harvey Norman, David Jones and JB Hi-Fi Ltd increased.

Steve Weisner Joins Evergreen Pacific, Will Open LA Office

Steve Wiesner has joined Evergreen Pacific Partners as a senior vice president. He will open a Los Angeles office for the Seattle-based firm. Weisner previously was a director at Lincoln International.

PRESS RELEASE

Evergreen Pacific Partners (“Evergreen”), Washington state’s largest private equity fund, has added Steve Wiesner as senior vice president. Wiesner will open the company’s first California office, in Los Angeles, where he will drive new investment opportunities throughout the state. Evergreen has three portfolio companies with operations in California.

Evergreen Pacific Partners, which manages two private equity funds totaling $700 million, invests in traditional buyouts, management-led buyouts, and growth equity investments involving traditional industry, middle-market companies in the Western U.S. and Canada. To date, the firm has completed six transactions involving companies in Washington, Arizona and California in the manufacturing, distribution, construction, radio, cable television and consumer industries. Its investors include foundations, endowments, pension funds, and West Coast-based CEOs with experience in Evergreen’s target industries.

Prior to joining Evergreen, Wiesner was a director at Lincoln International, a leading global middle-market investment banking firm, where he was involved in the origination and execution of a variety of M&A transactions and was responsible for the firm’s financial sponsor coverage effort on the West Coast.

“Three aspects about the California market make this a good move for us,” said T.J. McGill, co-founder and managing partner at Evergreen Pacific Partners. “First, the sheer number of companies in the state; second, the high percentage of companies that fit our investment focus; and third, the relative low level of investment activity by local and state-based private equity firms. Steve’s deep experience in investment banking as well as his network in California make him the perfect fit to lead our efforts there.”

Among the data EPP considered are:

Approximately 37 percent of all businesses in the Western United States are located in the area north of San Diego and south of Bakersfield.
Nearly 50 percent of the Southern California economy is considered “consumer discretionary” companies, including those in the autos/auto components, durables and apparel, consumers services, media, and retailing sectors, while one third consists of industrial/business services and the remaining 20 percent is nearly equally divided between healthcare, consumer staples, and materials.
“At a time in history where credit and investment is hard to come by, it’s great to join a firm that is both well capitalized and well connected,” said Wiesner. “Evergreen has a great track record of not only raising capital, but investing it wisely to create great companies that return value to shareholders. I’m looking forward to expanding the portfolio of California-based companies.”

Currently, three of EPP’s six transactions have involved California-based companies. The first was Finest City Broadcasting, based in San Diego. The second was CST Environmental, based in Brea. The third was Haney Transportation Logistics through the acquisition of Fresno-based Great American Transport. In all three cases, EPP was able to bring capital and debt funding to help companies grow faster and capitalize on market opportunities. Evergreen expects to replicate this success in the coming years in California.

Prior to Lincoln International, Wiesner was a partner at Zuma Capital Partners, a Los-Angeles-based private investment firm. He also worked in the M&A Group at Donaldson, Lufkin & Jenrette (subsequently Credit Suisse First Boston) in Los Angeles. Wiesner holds a Bachelor of Arts degree in Political Science from the University of Western Ontario and a Master of Business Administration degree from Columbia Business School in New York.

About Evergreen Pacific Partners

Based in Seattle, Wash., Evergreen Pacific Partners (www.eppcapital.com) currently manages two private equity funds totaling $700 million, with a focus on investing in traditional, middle-market companies in Western North America. Evergreen Pacific was co-founded by Timothy Bernardez, T. J. McGill, and Michael Nibarger. Evergreen Pacific’s acquisitions and investments include Western Broadband (Phoenix, Ariz.), Finest City Broadcasting (San Diego, Calif.), Gene Juarez Salons & Spas (Seattle, Wash.), Haney Truck Line (Yakima, Wash.), Nuprecon (Snoqualmie, Wash.) and CST Environmental (Brea, Calif.).

ShareThis


IPOs, Earnings Power India Stocks

Jindal Steel & Power Ltd plans to offer a stake in its power subsidiary that may raise more than $900 million. Stocks surged after Bank of India paid additional advance taxes indicating higher earnings.

“For All Obama’s Talk of Overhaul, the US has Failed to Wind in Wall Street”

Joseph Stiglitz is not impressed with the administration's response to the financial crisis:

For all Obama's talk of overhaul, the US has failed to wind in Wall Street, by Joseph Stiglitz, Comment is Free: What went wrong? Have the right lessons been learned? Could it happen again? The anniversary of the Lehman Brothers' bankruptcy and the freezing of the credit markets that followed is an occasion for reflection. I fear that our collective response has been mistaken and inadequate – that we may just have made matters worse.
The financial sector would like us to believe that if only the Federal Reserve and the Treasury had leapt to the rescue of Lehmans all would have been fine. Sheer nonsense. Lehmans was not a cause but a consequence: a consequence of flawed lending practices, and of inadequate oversight by regulators.
Financial markets had lent on the basis of a bubble – a bubble in large part of their making. They had incentive structures that encouraged excessive risk-taking and shortsighted behavior. And that was no accident. It was the fruit of vigorous lobbying, which strived equally hard to prevent regulation of changes in the financial structure, new products like credit default swaps – which, while supposedly designed to manage risk, actually created it – and ingenious devices to exploit poor and uninformed borrowers and investors. The sector may not have made good economic investments, but its political investments paid off handsomely.
Lehmans was allowed to fail, we were told at the time, because its failure did not pose systemic risk. The systemic consequences its failure entailed, of course, were used as an excuse for the massive bailouts for the banks. Thus the Lehmans example became at best a scare tactic; at worst it became an excuse, a tool, to extract as much as possible for the banks and the bankers that brought the world to the brink of economic ruin.
Had more thought gone into how to deal with Lehmans, the Treasury and Fed might have realized that it played an important role in the shadow banking system, and that it was important to protect the integrity of the shadow system which had come to play such an important role in the US and global financial payments system. But many of Lehmans' activities had no systemic importance. The administration could have found a path between the false dichotomy of abandonment or bailout. That would have protected the payments system, providing the minimum amount of taxpayer money. Shareholders and long-term bondholders would have been wiped out before any public money had to be put in.
Bailing out the US banks need not have meant bailing out the bankers, their shareholders, and bondholders. We could have kept the banks as ongoing institutions, even if we had played by the ordinary rules of capitalism which say that when a firm can't meet its obligations to creditors, the shareholders lose everything.
Unquestionably we should not have allowed banks to become so big and so intertwined that their failure would cause a crisis. But the Obama administration has created a new concept: institutions too big to be resolved, too big for capital markets to provide the necessary discipline. The perverse incentives for excessive risk-taking at taxpayers' expense are even worse with the too-big-to-be-resolved banks than they are at the too-big-to-fail institutions. We have signed a blank check on the public purse. We have not circumscribed their gambling – indeed, they have access to funds from the Fed at close to zero interest rates, and it appears that "trading profits" have (besides "accounting" changes) become the major source of returns.
Last night Barack Obama defended his administration's response to the financial crisis, but the reality is that a year on from Lehmans' collapse, it has failed to take adequate steps to restrict institutions' size, their risk-taking, and their interconnectedness. Indeed, it has allowed the big banks to become even bigger – just as it has failed to stem the flow of profligate executive bonuses. Obama's call on Wall Street yesterday to support "the most ambitious overhaul of the financial system since the Great Depression" is welcome – but the devil, as ever, will be in the detail.
There remain many institutions willing and able to engage in gambling, trading and speculation. There is no justification for this to be done by institutions underwritten by the public. The implicit guarantee distorts the market, providing them a competitive advantage and giving rise to a dynamic of ever-increasing size and concentration. Only their own managerial competence, demonstrated amply by a few institutions, provides a check on the whole process.
The Lehmans episode demonstrates that incompetence has a price. That there would be serious problems in our financial institutions was apparent since early 2007, with the bursting of the bubble. Self-deception led those who had allowed the bubble to develop, who had looked the other way as bad lending practices became routine, to think that the problems were niche or temporary. But after the fall of Bear Stearns, with rumors that Lehmans was next, the Fed and the Treasury should have done a serious job of figuring out how to manage an orderly shutdown of a large, complex institution; and if they determined that they lacked adequate legal authority, they should have requested it.
They appear, remarkably, to have been repeatedly caught off-guard. They claim in the exigency of the moment they were doing the best they could. There was no time for thought. And that explains how they veered from one solution to another: after saying that they did not want to bail out Lehmans because of a concern about moral hazard, they extended the government's safety net further than it had ever been. Bear Stearns extended it to investment banks, and AIG to all financial institutions. Perhaps they were doing the best they could at the time; but that is no excuse for not having anticipated the problems and been better prepared.
Lehman Brothers was a symptom of a dysfunctional financial system and regulatory failure. It should have taught us that preventing problems is easier, and certainly less costly, than dealing with them when they become virtually intractable.
I also think the administration should have moved faster "to restrict institutions' size, their risk-taking, and their interconnectedness," but I haven't completely given up hope that they will get this done. But I doubt it will go as far as I'd like.

World Markets Gain on Bernanke Comments

U.S. stocks closed higher after the release of better than expected retail sales data and comments from the Fed Chairman Bernanke. The chairman suggested that deepest recession in nearly eight decades has likely ended but job market recovery will be slow.

Used Vehicle Auctioneer KAR Files for IPO

NEW YORK (Reuters) - KAR Holdings Inc, which runs auctions for used vehicles, plans to go public and raise as much as $400 million, according to a regulatory filing on Monday.

KAR, based in Carmel, Indiana, runs 214 physical auction sites and several websites that facilitate the sale of cars unloaded by dealers, repossessed vehicles and “salvage” vehicles, such as those that have been damaged and declared a total loss by insurance companies but then repaired.

It does not take possession of the vehicles, but earns a fee from the buyer and seller in each sale.

KAR listed EBay Inc’s (EBAY.O) eBay Motors used car auction website among its competitors.

In 2008, KAR facilitated the sale of 3.2 million used and salvage vehicles and currently has 150,000 registered buyers according to the prospectus it filed with the U.S. Securities and Exchange Commission.

KAR plans to use the IPO’s proceeds to pay down debt and pay fees to its equity owners, which include private equity firms Kelso & Co., Parthenon Capital, and Goldman Sachs Capital Partners (GS.N).

KAR warned in the filing the tight consumer credit market could hamper demand for used cars.

Net revenues fell 5.3 percent to $881.6 million in the first half of 2009, while net income from continuing operations more than tripled to $9.3 million from $3 million over the same period.

The prospectus did not indicate when KAR might try to price the IPO.

KAR is the eighth company to file for a U.S. IPO in September, as companies continue to rush to submit paperwork to go public with markets now more hospitable. There were 20 filings in July and August combined and only five in the first six months of 2009.

The IPO will be underwritten by Goldman Sachs & Co. (Reporting by Phil Wahba; editing by Andre Grenon)

ShareThis


Words Of Wisdom On Pay-To-Play From One Who Knows

Connecticut State Treasurer Denise Nappier knows what she’s talking about when it comes to pay-to-play. After all, Nappier, who acts as a fiduciary for Connecticut Retirement Plans & Trust Funds, had to contend with the fallout from just such a scheme orchestrated by her predecessor, former Treasurer Paul J. Silvester. Silvester ultimately pled guilty to corruption charges.

Now, Nappier has a few words of advice for the Securities and Exchange Commission as it crafts rules aimed at ending pay to play at public pension funds nationwide.

“While I will always support efforts to provide for the highest ethical conduct in government, my experience with our own state’s reforms has taught me to carefully consider the unintended consequences of certain reforms,” Nappier wrote in a comment letter on the SEC’s Web site.

Nappier, like many other pension fund representatives to pen letters, said a proposed ban on placement agents would hurt pension funds, the very parties the ban is supposed to protect. Connecticut followed a different course as it righted its ship, banning “finder’s fees” but not payments to legitimate third-party representatives, and requiring disclosure of all fees paid.

But unlike many of her peers, Nappier didn’t limit her criticism of the proposed rules to the placement agent ban.

Nappier also urged the SEC to abandon a ‘look-back’ rule on campaign contributions. The proposals would prohibit an investment manager from providing investment advisory services to a public pension fund if one of its associates had made a campaign contribution to a pension trustee within the prior two years. The look-back rule would apply to contributions made even before the associate’s employment with the firm.

Nappier said this type of rule could prove costly for pension funds that have illiquid assets, which cannot be easily unwound.

“…All of such long-term pooled investment vehicles have significant, even Draconian, default provisions,” the letter stated. “Governmental investors cannot be placed in the position of potentially losing 50% or more of their capital account because a future hire triggers the retroactive attribution of a campaign contribution.”

Nappier also recommended a reconsideration of a proposed blanket ban on contributions to political party committees.

It “unfairly affects party committees in states like Connecticut with limitations on campaign contributions and robust campaign finance laws,” she wrote.


European Markets Waver; Michelin,Peugot Up

The August read of German investor confidence index increased. PSA Peugeot increased after it revised its loss estimate lower. Michelin & Cie increased after its chief executive offered positive earnings outlook on lower raw materials costs.

Google offers fast-flip option to newspapers

Google is holding out a helping hand to the embattled newspaper industry with a new way of browsing newspapers and magazines online. Eric Schmidt, chief executive, has criticised the formats of online editions of newspapers as slow and “pretty unpleasant to read.” Google unveiled “Fast Flip” at the TechCrunch50 conference in San Francisco on Monday as a [...]

Look for TJX to draw those frugal consumers, like a magnet

Filed under:

If you haven't purchased shares of The TJX Companies (NYSE: TJX), and can tolerate moderate risk, now's the time to establish a position to have a chance at outsized gains.

Off-price family apparel and home fashion retailer TJX (operator of the T.J. Maxx, Marshalls and HomeGoods chains) is poised to gain market share in the era of the frugal consumer.

Continue reading Look for TJX to draw those frugal consumers, like a magnet

Look for TJX to draw those frugal consumers, like a magnet originally appeared on BloggingStocks on Mon, 14 Sep 2009 18:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Add to digg Add to del.icio.us Add to Google Add to StumbleUpon Add to Facebook Add to Reddit Add to Technorati

Microsoft and Yahoo keep punching at each other

The love-hate relationship between Microsoft and Yahoo will be tuned to “hate” for the remainder of the month. In private, the companies are working on separate versions of integration plans that will send some Yahoo engineers to work for Microsoft as it prepares to take over delivering automated free and paid search results to Yahoo. On the [...]

UK Inflation Jump, Pound Eases; BAE Cuts Jobs

UK stocks edged higher and the pound declined after comments from the Bank of England Governor King. The central bank may lower the rates paid to banks on the deposits. BAE Systems will eliminate 1,116 jobs in the UK and close a plant in the northern UK.

Top Performing S&P 500 Stocks Since Lehman Bankruptcy

With the one-year anniversary of Lehman's bankruptcy now behind us, we updated our list of best performing stocks over the last year. Since the Friday before that weekend when Lehman went down and Merrill was taken over, the S&P 500 has declined by 16.2%. Over that same period, 89 of the 500 stocks (17.8%) currently in the S&P 500 are...


Golub Capital Raising $350 Million Mezzanine Fund

Mid-market lender Golub Capital has raised $58.3 million toward a new mezzanine fund, according to a regulatory filing. The first close on GC 2009 Mezzanine Partners, L.P. includes commitments from 75 investors.

The fund has a $350 million target, a source said. The firm invests in senior debt, second lien debt, sub debt, equity co-investments, and its own “unitranche” style of deal which involves a single loan debt financing.

Golub Capital benefitted from a short revival of interest in mezzanine debt in the early days of the credit crunch. From a Buyouts story in Fall 2007:

Prior to the credit crunch, senior lenders aggressively beat subordinated debt providers in speed, rate of closing and flexibility of terms, said Lawrence Golub, president of Golub Capital in New York. “It was a depressing time to be a traditional mezzanine” provider, Golub said. “Especially if you have no leverage, you’re getting whipped on most deals.”

At the time, the firm had placed on hold its plans to go public.

The drought of lenders to the middle market have surely benefitted the firm; in Q1 league tables, Golub Capital tied U.S. Bankcorp at top spot as lead LBO bookrunner, according to Thomson Reuters LPC.

Earlier this year the firm raised $200 million for GC Opportunity Fund II LP, the firm’s secondary strategy. The fund invests in secondary purchases of broadly syndicated first-lien bank loans. In March 2009 it was already 50% invested.

ShareThis


Entergy will be ready for the next power surge

Filed under:

Rare is the day I'll sell an electric power generation play, particularly nuclear power. Unlike France, the United States frittered away an opportunity to create a 21st century power generation system 30 years ago, and it will now play catch-up for 20 years, and nuclear will be a part of the solution.

Entergy Corp. (NYSE: ETR), the second largest nuclear power generator in the U.S., will be a part of that mix. It is performing as expected, which is why I'm reiterating my Buy rating for the company's shares, first recommended on May 12, 2009 at a price of $74.31.

Continue reading Entergy will be ready for the next power surge

Entergy will be ready for the next power surge originally appeared on BloggingStocks on Mon, 14 Sep 2009 16:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Add to digg Add to del.icio.us Add to Google Add to StumbleUpon Add to Facebook Add to Reddit Add to Technorati

What Was Obama Really Saying to Wall Street?

What was President Obama really trying to say in his speech timed to the one-year anniversary of the collapse of Lehman Brothers Holdings?

The President spent little time reminiscing. Gone were the oft-heard comparisons of the global financial crisis to the Great Depression, a phrase he mentioned only twice during the 30 minute speech speech. Housing foreclosures, which were at the heart of the financial crisis, and Wall Street bonuses, each drew only two references in his 3,750 word address.

Instead, a tally of the words President Obama repeated the most during the speech shows that three of his most frequently used words were: Crisis, risk and responsibility. He admonished Washington,

Wall Street and Middle America that they each had to act more responsibly and take fewer risks in order to prevent the next crisis. But who got off lightly and who took it on the chin?

Well here is a tally of the words and phrases that kept popping up in the president ’s nearly Wall Street address:

Number of times the President mentioned responsibility: nine
Number of times he used the phrase Wall Street’s “failure” of responsibility: one
Number of times he used the phrase Washington’s “failure” of responsibility: one
Number of times he used the word crisis: 19
Number of times he mentioned risk: 14
Number of times he mentioned taxpayers: 11
Lehman Brothers: two
FDIC: once
Federal Reserve: three
Securities & Exchange Commission: 0
Wall Street: three
Free Market: two
Recovery: seven
Mortgages: four


Should GE shareholders be happy about ‘The Jay Leno Show’?

Filed under: , , , , ,

Last year, I composed a not-so-bullish appraisal of NBC Universal's Jay Leno strategy. NBC Universal, which General Electric (NYSE: GE) has an 80% stake in, wanted to make sure that Leno's services did not wind up in the hands of a competing media entity when they handed The Tonight Show over to Conan O'Brien, so they bestowed upon him a talk program to be aired weeknights at 10 PM. It debuts tonight. I basically argued that NBC would survive without Leno, and that such an odd programming choice at 10 PM, when scripted intellectual assets are usually broadcast, might not be the optimal paradigm to engage.

Well, I still feel this is a risky move, but I do have to say that an article by Scott Collins over at the Los Angeles Times has piqued my interest in the expected economical benefit that Leno-at-10 might imply. Leno might not bring in a ton of eyeballs, but his profit margin could be acceptable given the lower capital necessary to fund his extravaganza.

Continue reading Should GE shareholders be happy about 'The Jay Leno Show'?

Should GE shareholders be happy about 'The Jay Leno Show'? originally appeared on BloggingStocks on Mon, 14 Sep 2009 16:20:00 EST. Please see our terms for use of feeds.

Read | Read | Permalink | Email this | Comments

Add to digg Add to del.icio.us Add to Google Add to StumbleUpon Add to Facebook Add to Reddit Add to Technorati