Category Archives: Private equity

Krugman Ponders the Fallen State of US Labor

Paul Krugman is troubled by this chart from the Bureau of Labor Statistics and is looking for explanations.

The Grey Lady Voices Some Skepticism About IPO of Single Family Rental Player Silver Lake

This site refrains from talking about individual stocks, since we don’t give investment advice. However, a potential sea-change is underway, as a large portion of the inventory of foreclosed homes is being converted to rentals. Private equity firms are pursuing this opportunity eagerly, as the combination of low financing costs and tight rental markets in the US means that, at least on paper, investor believe they can earn attractive income, with potential for appreciation, either by eventually selling the houses to individuals or by taking the company public.

Given all the excitement over this conversion (it was voted the best opportunity over the next 12 months at a real estate conference I attended in the fall), it was interesting to detect a fair bit in the way of reservations in an article in the New York Times on the first IPO in this space, Silver Lake.

On the Decline and (Maybe) Fall of Venture Capital

Roughly eight years ago, I had lunch with an ex-McKinsey colleague who had started a venture capital firm. His partners were raising a second fund. He was leaving. I wish I had taken notes, but his message was that the industry did not work.

Michael Olenick: How Fannie Enriches Private Equity Investors at Taxpayer and Homeowner Expense

By Michael Olenick, creator of NASTIACO, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data

There’s a strong argument that the competing goals of HERA, minimizing loss while promoting affordable housing, are impossible. But doing the opposite, increasing losses while discouraging affordable housing, is even harder, yet Fannie has done that.

Private Equity Collusion on Deals

By Nanea, a private equity insider

Last week, the New York Times reported on its successful effort to unseal evidence in a lawsuit alleging that the biggest private equity firms (so called “mega-buyout” shops) colluded to limit competition with one another during the Buyout Boom that preceded the financial crisis.

The story made me think about some of my own, non-business-related experiences with cooperative behavior among private equity rivals.

Why is a Price-Fixing/Collusion Lawsuit Against the Biggest Names in Private Equity Getting Only Cursory Notice?

It’s troubling that some stinging charges against the very biggest names in private equity are getting only passing attention in the financial media.

Do We Really Need Freddie to Subsidize Rental Investors?

Just because the banks are on one side of an issue does not always mean they are wrong, just that they might be right for the wrong reason.

Private Equity: The Mechanics of Intellectual Capture

By Nanea, a private equity insider

I thought I would make a brief digression into how private equity GP*s are able to use a web platform called IntraLinks as a vehicle to intellectually capture and, in a sense, hold prisoner their LP investors.

Private Equity Fund Terms

Yves here. Our next set of posts in our private equity series will provide background on how the industry operates

New Real Estate Train Wreck Coming: Securitized Rentals

No matter how bad things get, it turns out they can always get worse. Wall Street is about to foist a new “innovation” on investors that even the ratings agencies won’t touch.

Bain’s “Commitment to Transparency” Canard

By Nanea, a private equity insider

I’ll be having much more to say later about the Bain documents posted on Gawker.

In the meantime, I would like to point out the utterly misleading nature of the statement issued by Bain Capital in response to the documents’ release.

Gawker Releases Trove of Records on 21 Romney-Owned Bain Caymans Entities (Updated)

As a public service, I’m pointing to an important post at Gawker on some Mitt Romney investments that he has until now managed to shield from scrutiny.

Private Equity: A Government Sponsored Enterprise

By Nanea, a private equity insider, and Yves Smith

Private equity practitioners, including most famously Mitt Romney, often depict their sector as the epitome of private enterprise. These claims are false. Private equity firms not only depend directly and substantially on government support, they have also actively cultivated links to the state.

Our Coming Rentcropper Society

We are in the midst of a sea change in terms of the relationship of ordinary Americans to the housing market. Policymakers are not only in denial as to its magnitude, but are actively enabling courses of action that are likely to prove destructive.

Announcing Investigative Series on the Private Equity Industry

In the coming weeks, Naked Capitalism will publish an investigative series on the private equity industry that will include articles written by current industry participants with considerable experience.