| PE Week Wire - Friday, November 21 |
Random Ramblings
Perhaps the NYSE should close its trading floor today at 3pm, since that seems to be the witching hour for massive sell-offs. I’d bet Steve Schwarzman and Tony James might endorse such a proposal, given that Blackstone Group stock closed trading yesterday at a piddling $5.10 per share.
That’s the lowest-ever closing price for Blackstone shares, and is off 83.5% from its $31 per share IPO price in June 2007. It’s even down nearly 30% from the $7.23 per share one of Blackstone’s senior managing directors paid for 20,000 shares just six days ago. Brutal. Just brutal.
Other PE-related firms are also struggling mightily on the public markets, whether they be semi-hedgies like Fortress and Och-Ziff or business development companies like Allied Capital and American Capital. But Blackstone is the biggest name on the block, and it’s being treated as if it were Wall Street royalty (sarcasm intended).
People have been suggesting a Blackstone take-private ever since the day it priced, but you’ve got to wonder how much lower BX stock can trade before the firm buys back at least some of its shares. Like with interest rates, there isn’t too much lower for it to go.
*** Speaking of publicly-traded PE travails: Allied Capital said during its earnings call last week that it had laid off 19 of its 155 employees. The cuts came at all levels, and we’ve learned that they included managing directors Mike Gresius and John Fruehwirth.
That’s a big ‘ole 180 from just seven months ago, when both Gresius and Fruehwirth were promoted as part of a reshuffling prompted by COO Joan Sweeney’s announced intention to retire at year-end. Both men began reporting directly to CEO Bill Walton, with Gresius as vice chairman of the firm’s investment committee and Fruehwirth as deputy head of private finance. No word on if these moves mean that Sweeney will postpone her retirement, but it’s probably a safe bet.
Gresius has been with the firm since 1992, while Fruehwirth has been there since 2003. Both men are still listed on the Allied Capital website, and receptionists put me through to their voicemails yesterday afternoon without mentioning that they’d been laid off.
An Allied Capital spokesman declined to confirm the status of either man, saying that the firm does not comment on individual employees.
*** That aforementioned piece of information originally came in via an anonymous tip, which I then sourced independently. If you’ve got scoop on anything from personnel issues to unannounced deals to secondary sales, be sure to let me know via our anonymous tip system.
*** I've listened to Chinese Democracy twice so far, and can't decide if I love it or hate it.
*** Sign of the Times: Limited partners say that they’ve begun fielding the following calls from general partners: “We’re planning to do a capital call next week, but just wanted to make sure that you’ll be able to meet it.”
*** Along the same lines: I’ve confirmed widespread speculation that CalPERS has asked its general partners to postpone capital calls until 2009, if possible. But that should not be misinterpreted to mean that the system cannot honor such requests, as evidenced by a recent activity report showing 121 capital calls totaling over $1.06 billion for the month of September. That same report shows just under $140 million in distributions.
*** Have a great weekend, and squish the fish...
New at peHUB.com
* First Read, including the rise of journo-gurus and the art of the bootstrap.
* Connie on a new entrant into the VC ecosystem: Shareholder representatives
* The University of Michigan toasts its PE/VC allocation targets, but keeps on investing.
* Chrysler is providing Cerberus with all sorts of unwelcome publicity and scrutiny.
* Joanna notices that a lot of recent (read: past 2 years) VC-backed IPO companies are trading below their cash values.
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ACG-Thomson Reuters DealMakers Survey
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