Mon, Feb. 2, 4:07 AM
- Morgan Stanley (NYSE:MS) is shopping its oil-trading and storage business again after an earlier deal with Rosneft (OTC:RNFTF), valued at several hundred million dollars, fell through last month.
- Morgan Stanley is still seeking a similar price to that of its first offer, as oil storage prices soar due to the recent collapse of crude prices.
- Macquarie Group (OTC:MCQEF) and KKR (NYSE:KKR) have emerged as early contenders to acquire the unit.
Tue, Jan. 27, 10:35 AM
- “Challenges in energy and credit are likely to damp results,” says BofA's Mike Carrier, who expects the strongest quarter at Blackstone (BX -0.8%) and the weakest at Carlyle Group (CG -0.8%).
- A Bloomberg survey of analysts finds them seeing a 73% Y/Y profit decline at Carlyle, 63% at Apollo Global (APO +0.2%), 60% at KKR (KKR -1.4%), and Blackstone - the most diversified - at just 32%.
- The P-E industry is entering the later stages of a selling cycle which began in 2012 and has made investors a fortune, but now is under pressure to put a whopping $1.2T to work. It should find ample opportunity in the energy sector.
- ETFs: PSP, PEX
Sat, Jan. 24, 8:25 AM
- In a low-yield world, the newly launched iBillionaire High Dividend Index - which tracks the trading moves of 25 investing-savvy billionaire investors such as Stanley Druckenmiller, James Dinan and Nelson Peltz - actually lives up to its name with a dividend yield of 5.34%.
- At 24%, the index has a high allocation of energy shares, including OXY, TRP, CNP, COP, BP, ATLS, CVI, WMB, APL, RIG and ARP.
- Also worth noting is that the index contains some high-yielding mortgage REITs, an area most investors hate right now but where billionaires seem to find value; examples are NRF, AGNC and CIM.
- No mutual fund or ETF tracks this index, but it offers a fishing pond of income investment ideas to research further.
- The top 20 holdings: TLM, CVC, GM, TIME, AEE, D, STAY, KMI, TROX, EXC, STNG, PPL, IRM, PFE, KKR, KAR, F, MIC, LO, ABBV.
Thu, Jan. 22, 1:14 PM
- "The pace of change has been surprising," says Igor Rozenblit, the SEC's co-head of private-funds compliance, noting P-E firms have put a stop to some of their worst violations, but still have room for improvement.
- The SEC last May said it found illegal fees or severe compliance shortfalls in more than half the P-E firms it reviewed starting in 2012.
- Firms including Blackstone (BX +2.9%) and KKR (KKR +2.9%) have ended the collection of certain fees, begun disclosing previously hidden charges, and refunded some bills to investors.
- A report in the WSJ from last night, says KKR refunded money to investors in some of its buyout funds after the SEC found they had been overcharged.
- ETFs: PSP, PEX
Tue, Jan. 20, 12:23 PM
- “It’s going to be a great opportunity," said Henry Kravis about one month ago, speaking about the plunge in oil prices. “There’s a lot of debt out there today that is trading at pretty big discounts from par just because of the question, will some of these companies be able to survive.”
- KKR is eyeing a raise of $2.5B-$3B for a second special situations fund after putting money to work from the previous pool faster than expected, reports Bloomberg.
- Among target investments would be financing to companies hurt by the oil price collapse, and another area is Asia, where KKR sees the opportunity to step in as China - its banks dealing with their own NPLs - pulls back.
Mon, Jan. 12, 2:51 PM
- "We now see less room for multiple expansion," says JMP's Devin Ryan on his downgrade of Morgan Stanley (MS -1.4%) to Market Perform from Market Outperform. The stock was the team's top pick in 2014, but Ryan notes gains of 25%, 65%, and 28% makes three straight years of significant outperformance.
- The stock's now trading at about 12x the team's 2015 estimates and 1.2x the forward book value estimate.
- Ryan does see opportunity elsewhere, though, particularly E*Trade (ETFC -1.5%) in the retail brokerage sector as earnings growth remains elevated, and Lazard (LAZ -1.2%) in the bulge bracket investment bank area as the M&A cycle still has room to run.
- 2015 is shaping up to be better than 2014 for alternative investment managers as well, says Ryan, naming Fortress Investment Group (FIG -2.2%) and KKR (KKR -2.1%) as top picks.
- Previously: JMP Securities: Time to ring the register on Morgan Stanley (Jan. 12)
Tue, Jan. 6, 2:38 PM
- One of today's worst-performing sectors as oil tumbles below $48 per barrel is private-equity. It was late last year Blackstone's Steven Schwarzman told investors he was itching to buy into the dive in energy, a promise he made good on in the first session of this year. In general one would think the plunge is a good thing for the opportunistic types who manage these companies.
- In late December, it was estimated buyout firms had lost a combined $11.7B in 27 publicly traded oil producers since June, and that was with oil nearly $10 higher than it is today.
- ETFs: PSP, PEX
- Other individual names: KKR (KKR -2.1%), Fortress Investment (FIG -2.7%), Apollo Global (APO -3.5%), Oaktree (OAK -3.9%), The Carlyle Group (CG -2.8%), Ares Management (ARES -1.8%).
Dec. 22, 2014, 4:59 PM
- Encana (NYSE:ECA) and Mitsubishi subsidiary Cutbank Dawson Gas Resources agree to sell natural gas gathering and compression assets supporting Montney development in the Dawson area of British Columbia to a partnership of Veresen (OTC:FCGYF) and KKR for C$412M.
- Veresen will provide gathering and compression services to ECA under a fee-for-service arrangement in a dedicated area of mutual interest within the Montney, and aims to spend up to C$5B of new midstream expansion to support development within the Montney; the ECA partnership plans to invest $600M-$700M in the play in 2015.
Dec. 18, 2014, 8:31 AM
- After a couple of small, but wildly profitable shale deals several years ago, KKR went for a big one with the 2011 $7.2B buyout of Samson Investment - the largest-ever buyout of an oil and gas company.
- The investment at the moment is far underwater, reports the WSJ, as natural gas prices plunged almost immediately after the purchase, and the recent crash in crude oil has socked Samson even further. The company has lost more than $3B since the buyout, and KKR and partners' $4.1B investment has shrunk by 75%.
- The losses haven't diminished KKR's appetite for energy deals. "I'm glad we’re in the position that we are, as prices have come down significantly,” said Henry Kravis recently. "We see this as a real opportunity."
- As for Samson, analysts expect KKR will need to inject cash by early 2016, barring a big rise in oil and gas prices, or get better-than-expected proceeds from asset sales.
- In other news, Morgan Stanley's Michael Cyprys initiates KKR with a Buy.
Dec. 15, 2014, 10:56 AM| 1 Comment
Dec. 13, 2014, 2:16 PM
- Leon Black’s Apollo Global Management (NYSE:APO) appears to have edged out KKR (NYSE:KKR) in the final round of bidding for PetSmart (NASDAQ:PETM), NY Post says.
- A deal could be announced as soon as this weekend.
- Banks led by Barclays and Citi are arranging $6.25B in debt financing, which is more than 6.5x PETM's Ebitda, exceeding the Fed's guideline of 6x Ebitda. Sources say at least two more banks dropped out of the running in recent weeks after being warned by the Fed and the OCC about taking on excess leverage.
- Previously: Banking issues cloud PetSmart buyout (Dec. 8), Report: Banker anxiety could derail PetSmart buyout (Dec. 5), P-E firms circle around PetSmart (Dec. 3)
Dec. 4, 2014, 10:19 AM
- In private-equity, Blackstone (BX +1.4%) and KKR & Co. (KKR +0.9%) post gains after being initiated with Overweight ratings, while Carlyle Group (CG -1%) and Oaktree Capital (OAK -0.5%) are started at Equal Weight.
- Moving onto traditional asset managers, Invesco (IVZ -0.5%) is rated Overweight, while T. Rowe Price (TROW -0.3%), Legg Mason (LM -1.5%), Franklin Resources (BEN -0.9%), and BlackRock (BLK -0.2%) are all started at Equal Weight.
Nov. 20, 2014, 3:35 PM
- Apollo Global (NYSE:APO) and KKR are among more than a dozen private-equity firms revising last year's annual reports to more clearly disclose fees and expenses charged to their clientele.
- “Everyone is doing it in response to the regulatory climate and the statements that have been coming out of the SEC,” says a lawyer who represents buyout firms.
- The P-E players have no doubt been meeting with their fund investors to clear up any misunderstandings, and while some have taken the additional step of revising old filings, others don't want to do so for fear of attracting more regulatory scrutiny to old practices.
Nov. 19, 2014, 2:06 AM
- As the auction for PetSmart (NASDAQ:PETM) heats up, buyout firms KKR (NYSE:KKR) and Clayton, Dubilier & Rice have teamed up to take the pet food retailer private for more than $7.5B, Reuters reports.
- Petsmart, which reported a FQ3 beat after the bell yesterday, said in August it would explore a potential sale amid pressure from Jana Partners and other activist investors.
- KKR and CD&R are planning to submit a joint bid next month. Apollo Global Management (NYSE:APO) and BC Partners are also considering offers.
- PETM +2.6% AH
Nov. 7, 2014, 12:58 PM
- P-E firms including KKR, Apollo Global Management (NYSE:APO), BC Partners and Clayton Dubilier & Rice have been invited to the final round of bidding for PetSmart (NASDAQ:PETM), WSJ reports.
- A deal to take PETM private would be the largest leveraged buyout of the year, according to data from Dealogic.
Oct. 28, 2014, 5:46 PM
- Anadarko Petroleum (NYSE:APC) +0.4% AH after Q3 earnings fell short of analyst expectations but revenue rose 30% to $5.01B, as stronger sales volume offset the impact of weaker average selling prices.
- Q3 total sales volume of crude oil, natural gas and natural gas liquids gained 9.5% Y/Y to 849K bbl/day from 775K a year ago.
- APC had sold its China subsidiary along with other assets during Q3, increasing its cash on hand to $8.3B.
- APC raises its full-year sales volume expectations for the third time this year, to a new range of 304M-306M boe, primarily driven by strong results from its Wattenberg horizontal program, where oil volumes doubled from Q3 of last year.
- Separately, P-E firm KKR says it will help APC develop its Eaglebine acreage in south Texas with a non-operated stake in the project; financial terms were not disclosed, but KKR says it expects to participate in 500 wells.
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