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Mon, 24-Aug-2009 Private equity firm AIG Private Equity Ltd. published its 2008 Annual Report that includes the Chairman’s Statement by Eduardo Leemann, Chairman of the Board for AIG Private Equity, that discusses the firm’s performance in 2008 and their outlook going forward. See a copy of AIG Private Equity Ltd.’s 2008 Annual Report below and/or it can be directly downloaded here.
Certain Quotes from the Chairman’s Statement by Eduardo Leemann, Chairman and CEO of AIG Private Equity
- 2008 was a disappointing year. “2008 was a disappointing year. The global financial crisis that began in 2007 intensified sharply following the bankruptcy of Lehman Brothers in September 2008, and credit markets came to a near standstill, with lenders unwilling to assume counterparty risk. Uncertainty and lack of credit had a significant impact on an already weak real economy, with most developed economies contracting sharply in the fourth quarter. Public equity markets turned in their worst performance in decades, with many major indices down 30–40% or more for the year.” Read More »
Mon, 3-Aug-2009 Private equity firm Apax Partners published its 2008 Annual Report that includes the Chief Executive’s Letter by Martin Halusa, CEO of Apax Partners, that discusses the firm’s performance in 2008 and their outlook going forward. See a copy of Apax Partners’ 2008 Annual Report below and/or it can be directly downloaded here.
Certain Quotes from the Chief Executive’s Letter by Martin Halusa, CEO of Apax Partners
- Private equity model is robust and relevant in these turbulent times. “Given the dramatic events in the financial services industry and the global economy during 2008, I would like to start by stating clearly that we believe the private equity ownership model is robust and relevant in these turbulent and worrying times.”
- Private equity is a viable alternative to public market and family ownership. “In the last decade, private equity has become an established and viable alternative to public market and family ownership, and we believe that this shift is here to stay. It is our view that companies will continue to alternate between public and private ownership in accordance with their funding needs and the ability of the public markets to value them correctly, fund their growth and deal with significant changes in strategy, which may impact short-term performance.” Read More »
Wed, 22-Jul-2009 Onex is one of North America’s oldest and most successful private equity firms and publicly-traded on the Toronto Stock Exchange under the stock symbol OCX. Onex provides the firm’s insight on 2008 and the outlook going forward in its 2008 Annual Report. See below a copy and/or directly download it here.
Certain Quotes from Onex’s 2008 Annual Report
- Tumultuous economic environment to have significant impact on 2009. “It is widely accepted that the tumultuous economic environment that shocked the world in 2008 will continue to have a significant impact on 2009. Global equity markets continue to suffer after facing some of the largest losses in history and, despite efforts by central banks to stabilize the global financial system, lending has not yet resumed in any substantial manner.”
- Past acquisition activity fueled by abundant and inexpensive credit. “The period 2005 to 2007 were years of significant acquisition activity fuelled in part by credit that was abundant and inexpensive.” Read More »
Tue, 21-Jul-2009 3i Group, one of largest private equity firms in Europe and publicly listed (London Stock Exchange: III.L), published its 2009 Report and Accounts that included the Chairman’s Statement and CEO’s Statement that provides key insight and commentary by Baroness Hogg, Chairman of 3i Group, and Michael Queen, CEO of 3i Group, with regards to 2008 and the outlook going forward. See a copy of 3i Group’s 2009 Report and Accounts below and/or can be downloaded here.
Certain Quotes from the Chairman’s Statement by Baroness Hogg, Chairman of 3i Group
- Significant decline in net asset value. “During the year to 31 March 2009, 3i’s net asset value per share fell from £10.77 to £4.96, in sharp contrast to the strong returns of the previous five years. The most rapid economic downturn in 3i’s history, the dislocation of capital markets and the collapse of mergers and acquisitions activity all undermined the value of our portfolio. It also led to a significant increase in the leverage on our balance sheet, which itself magnified our negative return.” Read More »
Mon, 20-Jul-2009 Terra Firma, one of largest private equity firms in Europe, published its 2008 Annual Review, the Letter from the CEO provides insight and commentary by Guy Hands, Founder, Chairman and Chief Investment Officer of Terra Firma, with regards to 2008 and the outlook going forward. On March 17, 2009, Terra Firma announced that it is separating the Chairman and CEO positions for Guy Hands with Tim Pryce becoming the CEO. See a copy of Terra Firma’s 2008 Annual Review below and/or can be downloaded here.
Certain Quotes from the Letter from the CEO by Guy Hands, Founder, Chairman and Chief Investment Officer of Terra Firma
- Financial world changed beyond recognition. “…the financial world has changed beyond recognition. Governments now own, or effectively control, many of the biggest financial institutions on the planet. Some financial groups are breaking apart, others are merging, and a few have simply ceased to exist.”
- Significant stock market value destruction. “The dramatic worldwide decline in stock market values has destroyed more than five years of growth in the value of listed investments. Nominal stock market valuations in the UK are effectively back to those last seen in 1997, while real share values have retreated to 1993 levels.” Read More »
Thu, 16-Jul-2009 Fortress Investment Group (NYSE listed under the symbol “FIG”) is a leading global alternative asset manager with approximately $29.5 billion in assets under management as of December 31, 2008. The firm raises, invests and manages private equity funds and hedge funds.
In Fortress’ 2008 Annual Report, the Shareholder’s Letter provides insight and commentary by Wesley Edens, Co-Founder, Chairman and CEO of Fortress Investment Group, with regards to 2008 and the outlook going forward. See a copy of the Fortress Investment Group’s 2008 Annual Report below and/or can be downloaded here.
Certain Quotes from the Shareholder’s Letter from the Wesley Edens, Chairman and CEO of Fortress Investment Group
- 2008 was single most volatile and difficult year ever experienced. “2008 was the single most volatile and difficult year in the financial markets that we have ever experienced. To say the least, it is very good to have last year behind us. Since the credit crisis began in July 2007, we have experienced a near perfect storm of a severe global economic recession, weak global equity markets, moribund debt markets, a banking system of questionable solvency, and steep declines in the value of virtually every asset imaginable.”
- Still a significant amount of deleveraging to go. “What began as a “containable” financial crisis in US subprime mortgages has spread to a financial crisis globally, and although the world is considerably less leveraged today than it was a year and a half ago, there is still a significant amount of deleveraging to go.”
- Recovery does not seem imminent. “It is hard to imagine that there can be a meaningful recovery until credit markets are reestablished and employment and housing find a bottom, none of which seems imminent.”
- Tremendous dislocations produce once in a lifetime investment opportunities. “These tremendous dislocations, while violent and unnerving, are of course exactly the types of markets that produce “once in a lifetime” investment opportunities.” Read More »
Fri, 26-Jun-2009 The Carlyle Group, one of the world’s largest private equity firms, published its 2008 Annual Report in May 2009 providing perspectives from the Founders and Managing Directors (William Conway, Jr., Daniel D’Aniello and David Rubenstein) of The Carlyle Group’s in their Letter from the Founders. See a copy of The Carlyle Group’s 2008 Annual Report below and/or can be downloaded here.
Certain Quotes from Letter from the Founders (William Conway, Jr., Daniel D’Aniello and David Rubenstein)
- World changed dramatically in 2008. “Nonetheless, the year 2008 was a humbling experience for us and most of the financial services industry. After several spectacular years of unprecedented growth, product innovation, geographic expansion, capital deployment and investment gains, our world changed dramatically.”
- Changes in private equity. “On its face, the private equity industry doesn’t appear to have altered much. But look closer and the changes begin to appear: deal flow has slackened; exits are fewer; investors are hesitant to commit fresh capital; stock prices are down; and debt and equity valuations have been hard hit. Some portfolio companies have restructured, sought bankruptcy protection and even liquidated.”
- Private equity landscape has changed for the foreseeable future. “In 2008, the financial landscape changed—and it will remain changed for the foreseeable future. Operating conditions for our portfolio companies will remain challenging. Transactions will be fewer and smaller. More equity will be required and debt terms will be less favorable. And hold periods will increase while returns will decrease.” Read More »
Wed, 24-Jun-2009 The Blackstone Group, one of the world’s largest private equity firms, published its 2008 Annual Report in March 2009 providing Stephen Schwarzman‘s, Chairman, Chief Executive Officer and Co-Founder of The Blackstone Group, Letter to the Unitholders. See a copy of The Blackstone Group’s 2008 Annual Report below.
Certain Stephen Schwarzman’s Quotes from Letter to the Unitholders
- 2008 was one of the most challenging environments since the Great Depression. “We ended 2008 and begin 2009 in one of the most challenging equity, credit and economic environments since the Great Depression. Economies around the world have all weakened significantly and, in the case of most developed nations, have declined very sharply. Liquidity in the global banking system and capital markets has collapsed, restricting borrowing opportunities for most individuals and corporations. Almost every asset class, including equities, debt and commodities, has been sharply devalued, and financial services companies’ earnings and stocks have been among the hardest hit.”
- $27 billion in dry powder ready for investment. “Overall, as of February 27, 2009, we have dry powder in the form of approximately $27 billion in funds to invest when we believe values are compelling.” Read More »
Thu, 18-Jun-2009 Kohlberg Kravis Roberts & Co., one of world’s largest private equity firms, published its 2008 Annual Review in April 2009 discussing Henry Kravis‘ and George Roberts‘ comments in the Letter from the Founders. See a copy of KKR’s 2008 Annual Review below.
Henry Kravis and George Roberts Quotes from Letter from the Founders
- 2008 was a year of dislocation and challenge. “[2008] was a year of severe dislocation and extraordinary challenge. It began with many predicting an economic slowdown and ended, as far fewer anticipated, with the economy mired in the worst financial contraction since the 1930s.”
- Ramifications of 2008′s turmoil. “There were many ramifications of the year’s turmoil, including a sharp increase in unemployment, a widespread decline in asset prices, a fall in global industrial activity and the dismantling of institutions once thought to be indispensable to capital formation.”
- Erosion of trust in capitalism. “Even more traumatic was the erosion of trust in financial institutions, in business and in capitalism itself. Capitalism relies on confidence: confidence that markets are efficient, that economic behavior is rational, that risk can be assessed and managed and, most importantly, that measures of value accurately represent actual underlying value. The events of 2008 undermined this confidence and, with it, many of the investment community’s deepest convictions. It will take the collective efforts of many organizations to restore the trust necessary for capitalism to flourish once again.” Read More »
Tue, 19-May-2009 Permira, one of Europe’s largest private equity firms, published its 2008 Annual Review in late April 2009 discussing the firm’s 36% writedown of its investment portfolio, Damon Buffini‘s comments in the Chairman’s letter, and outlook for 2009. See a copy of Permira’s 2008 Annual Review below.
Damon Buffini Quotes from Chairman’s Letter
- Lack clarity on outlook and market conditions may get worse. “I have not experienced such a lack of clarity about the outlook in my career and there may be worse to come before we see a recovery.”
- Difficult decisions with portfolio companies. “We have taken some difficult decisions over the last year and there will be more to come in the months ahead, as we seek to secure the long-term future of the Permira funds’ companies. The same is true of any business right now, public or private.”
- Changes in the private equity industry.
- Deal sizes will be smaller. “It will…be a very long time before the prefix ‘mega’ is applied again to the industry’s activity; investments will be smaller, albeit there will still be opportunities to invest in and transform many businesses.
- More regulation. There may well be a higher degree of regulation than before, which will mean working even more closely with lawmakers and regulators. Read More »
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