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Wed, Jan. 27, 9:46 PM
- Last month, Carlyle Group (NASDAQ:CG) co-founder David Rubenstein was licking his chops over "maybe the greatest energy investing opportunities we've ever seen," and Avenue Capital's Marc Lasry called the energy bust a "once-in-a-lifetime opportunity."
- Source: WSJ
- Oil, however, has continued to plunge, and along with it the finances of already-struggling oil-and-gas companies. Avenue has been burned. It quickly put to work $600M from $1.3B raised about ten months ago, and has lost about $200M. Blackstone's (NYSE:BX) GSO Capital, on the other hand, is treading carefully, having only invested about $100M of $3.5B raised for an energy fund last year.
- "The only way we get hurt is if oil goes to $20 a barrel and stays there for a year or two,” says Lasry. "I'll make that bet, because if oil goes to $20 and stays there, that means the whole industry is in bankruptcy.” His fund is buying up debt of industry players yielding more than 10%. If the companies survive, it pockets those yields, and if not, Avenue's debt holdings will be turned into equity and there's a chance to profit that way.
Tue, Jan. 26, 9:51 AM
- Two German government sources have denied a Handelsblatt report that Berlin had given its consent to sell Airbus's (OTCPK:EADSY -0.1%) defense electronics unit to buyout groups KKR and Carlyle (NASDAQ:CG).
- The sale is part of a plan by Airbus to dispose of assets with combined revenues of around €2B, following a strategic decision to focus on civil and military aeronautical and space assets in the face of low European defense spending.
- Previously: Airbus defense asset sale 'progressing well' (Jan. 07 2016)
- Previously: Airbus close to choosing final electronics bidder (Dec. 15 2015)
Thu, Jan. 21, 10:28 AM
- Fans of P-E and contrarian headline indicators may be sniffing a bottom for the sector as Bloomberg pronounces Henry Kravis' (KKR +3.5%) golden age for private equity claim a bust.
- Kravis was referring to the years prior to the financial crisis, but a check of the scoreboard finds those mega-deals have mostly produced mediocre results. The endowments and pension plans which invested in those most of those deals would have done better calling up Vanguard.
- “The big deals were done more out of ego than economic sense," says an advisor to pension plans. "People paid steep prices and put on too much debt.”
- The question going forward is if the P-E giants have learned their lesson. According to Bloomberg's sources, TPG Capital has sworn off the huge deals, and other players have vowed to focus on price, not size.
- Interested parties: Blackstone (BX +3.5%), Apollo Global (APO +2.8%), Carlyle Group (CG +4.2%)
Wed, Jan. 20, 4:48 PM
- The first export of U.S. crude oil in four decades arrived in Europe early today, reaching the French port of Marseille before sunrise after leaving from Texas nearly three weeks ago, Financial Times reports.
- Oil trader Vitol is expected to unload the shipment - a mix of ultralight oil from the Texas Eagle Ford shale formation produced by ConocoPhillips (NYSE:COP) - which will then travel by pipeline to one of two refineries the company operates in Europe under a joint venture with the Carlyle Group (NASDAQ:CG).
- Energy analysts say it could take a while before the volume of U.S. oil exports expands beyond today’s trickle, as U.S. crude output is expected to fall later this year as producers face shrinking revenues and soaring debt due to plunging oil prices.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Jan. 20, 8:07 AM
- Citing "uncertainties developed regarding the transaction," Symantec (NASDAQ:SYMC) and Carlyle (NASDAQ:CG) have amended the terms of Carlyle's purchase of Symantec's Veritas storage software unit to cut the purchase price from $8B to $7.4B, and double Veritas' offshore cash balance to $400M.
- Symantec will now be paid $6.6B in cash and left with a $400M equity interest in Veritas. After-tax cash proceeds are expected to total $5.3B, down from an original $6.3B.
- The deal is still expected to close on Jan. 29. The sale price cut follows a Nasdaq selloff, as well as November reports indicating banks had postponed marketing the debt Carlyle planned to use to finance the Veritas deal.
- Separately, Symantec now expects FQ3 revenue, op. margin, and EPS to be above the midpoints of the guidance ranges provided in its Nov. 5 FQ2 report. FQ3 results are due on Feb. 4.
- Symantec has dropped to $18.05 premarket, making new 52-week lows in the process.
Tue, Jan. 5, 10:22 AM
- The roughed-up stock of Carlyle Group (NASDAQ:CG) - down about 50% since last May - has found a friend in Okumus Fund Management which purchased a near-9% stake in the P-E player in December.
- The $110M investment represents 20% of AUM at Okumus.
- "It's a no-brainer," says Ahmet Okumus. "It's a good business that generates a lot of free cash flow."
- It's been a rough ride for private equity in general, but Carlyle has been especially punished amid losses at its hedge fund unit and lack of investor interest in buying up the loans for its purchase of Veritas.
- Okumus reminds it's the banks - not Carlyle - which are on the hook for any unsold Veritas paper. "If you look at Carlyle's returns, they've been around for 30 years. They've invested in much more difficult markets than this, and they've done well."
Mon, Jan. 4, 9:56 AM
- "Given the aging vintage of the current economic cycle, we continue to become more selective/defensive across the asset manager vertical," says analyst Craig Siegenthaler, downgrading The Carlyle Group (CG -3.1%) to Neutral from Outperform with price target of $18.
- Siegenthaler views Carlyle as one of the most "offensive" alternative asset manager names thanks to its 1) large accrued carry balance, 2) high profit composition from performance fees, 3) a business weighing toward P-E and real assets.
- See also: Credit Suisse downgrades more asset managers (Jan. 4)
Dec. 22, 2015, 3:53 PM
- Claren Road Asset Management suffered another $950M in withdrawal requests this quarter, according to Bloomberg, and the fund will start the year with just $1.25B in AUM vs. $8.5B at the peak in Sept. 2014.
- At issue for the hedge fund - majority owned by Carlyle Group (NASDAQ:CG) - is a 10.1% decline in 2014, and another 5.2% fall in this year's first three quarters.
- Claren Road received redemption requests of roughly $2B in Q3, forcing the fund to delay paying money back in order to minimize the damage to those investors hanging on.
Dec. 16, 2015, 7:33 AM
- "The main driver of our downgrade is our view of a lack of a near-to intermediate term positive catalyst for the shares," says analyst Brian Bedell, cutting Carlyle (NASDAQ:CG) to Hold from Buy, with price target reduced to $16 from $21.
- He notes risk of lower realizations into 2016 and risk of continued subdued performance of three of the company's four business units.
- Since topping out for the year at the start of May, CG is down about 50%.
Dec. 15, 2015, 10:18 AM
- The group is sporting some nasty looking price charts, but Citigroup isn't seeing any dip-buying opportunities just yet.
- The team downgrades Affiliated Managers Group (AMG +4.2%), OM Asset Management (OMAM +0.3%), and the Carlyle Group (CG +2.1%) to Neutral from Buy.
- Waddell & Reed (WDR +1.1%) and Artisan Partners (APAM +0.2%) are downgraded to Sell from Neutral.
- Previously: Asset managers punished in high-yield selloff (Dec. 14)
Dec. 10, 2015, 10:26 AM
- Outliers to the upside in private-equity today are KKR (KKR +3.8%) and Apollo Global (APO +3.9%) as Jefferies initiates coverage on three of the battered sector's names.
- KKR is started with a Buy and $20 price target - 27% upside to last night's close. Apollo is started with a Buy and $19 PT - 25% upside to last night's close.
- The Carlyle Group (CG +0.7%) is initiated with a Hold and $19 price target.
Dec. 8, 2015, 9:52 AM
- With the stock price charts of all three moving sharply down and to the right for several months, Bank of America pulls Buy ratings on Apollo Global (APO -3%), Blackstone (BX -2.6%), and Carlyle Group (CG -1.5%). All are downgraded to Neutral.
- Not completely giving up on the sector, BofA upgrades the equally beaten-down Ares Management to a Buy.
Nov. 23, 2015, 9:38 AM
- Airbus (OTCPK:EADSY) aims to pick a buyer for its defense electronics unit by the end of 2015 as part of its plan to dispose of assets with combined revenues of around €2B, Chief Executive Tom Enders told Frankfurter Allgemeine Sonntagszeitung.
- The final offers for the defense electronics business, which could fetch a price of up to €1B, are due early next month.
- Sources told Reuters that Rheinmetall (OTCPK:RNMBY) has tied up with buyout group Blackstone (BX -1%) to bid for the unit, rivaling private equity groups Cinven, Carlyle (CG +0.5%) and (KKR +0.3%) as well as French peer Thales (OTC:THLEY).
Nov. 17, 2015, 11:43 AM
- Reuters reports banks have withdrawn financing for the $8B sale (announced in August) of Symantec's (SYMC -0.2%) Veritas storage software unit to Carlyle (CG +0.1%). The sale has been expected to close by Jan. 1.
- Symantec hasn't moved much on the report. The market's original reaction to the deal was lukewarm, with Symantec's $1.5B+ expected tax bill sparking criticism. Symantec has promised a large chunk of the deal's $6.3B in expected net proceeds to shareholders, and has suggested it will use some of the remaining funds to make security acquisitions.
Nov. 3, 2015, 8:11 PM
Nov. 2, 2015, 3:14 PM
- Leading the way higher for the roughed-up sector are alternative players like Och-Ziff Capital (OZM +10.1%) and KKR (KKR +9.3%). There's also Blackstone (BX +4.3%), Fortress (FIG +3.2%), Oaktree (OAK +4.2%), and Carlyle Group (CG +7.4%).
- Traditional names like Manning and Napier (MN +11.7%), Affiliated (AMG +2.6%), Waddell & Reed (WDR +2.7%), Virtus Investment (VRTS +3.7%), and Legg Mason (LM +2.3%).
- Many of these names have reported Q3 already, and the results have mostly disappointed. On tap for tomorrow is Och-Ziff.
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