Worries of Limited Partners

Reuters published a story this week discussing the growing concerns of Limited partners – large pension funds and other institutional investors that pour money into private equity funds. They are worried that their returns are at risk as buyout firms drift from their expertise amidst the credit crisis. Some buyout firms are now starting to pursue investments in emerging markets, taking minority stakes in public companies or buying debt of their portfolio companies.

- Jeff Watson

Investment Banking Fees Plummet

In his blog, Taom Traulli notes that bulge bracket investment banks have seen their advisory fees fall significantly. Goldman Sachs, an investment banking firm, earned $1.5 billion in fees last year. This year that number has fallen 77% across the industry.

- Jeff Watson

BCE will reward shareholders

According to David Friend of the Canadian Press, investors are shying away from BCE stocks and the risks of its current quagmire. He goes on to point out that though the stock price is likely to fall because the chances of another potential buyer entering the fray seems unlikely, there is still an upside according to an analysis of BCE's position in the latest issue of the Investment Reporter, an industry newsletter.
"Should the takeover fall through, BCE shares would likely drop, but after that, they should recover. After all, BCE would likely reward its shareholders with a special dividend, higher regular dividends or share buybacks," the publication said.

- Jeffrey Watson

Private Equity's Image

Private equity has an image problem with unions and employees of the big, public companies who say that PE destroys wealth by stripping out company assets and downsizing. One of my favourite PE people is David Rubenstein, head of one of the largest PE firms in the USA, Carlyle. He has a quiet sense of irony and self depreciating humour clearly evident as he he asked, "What, no demonstrators?" referring to the crowds following him around to public appearances. He gave a speech describing PE to the new President of the USA. Peter Lattman at the Wall Street Journal tells us about his 10 points to make to Barrack Obama next January, 2009.
Probably the big plus about PE is that, as David Rubenstein of Carlyle says, is that it is not your father's PE. In other words, that Gordon Gehko type barnstorming share holders' meetings and selling off the company assets is not today's PE fellow. Here's a taste of what the WSJ reports on David Rubenstein's speech:
No. 1: This is not your father’s private-equity industry. Rubenstein would remind the leader of the free world that the industry has grown tremendously and now is a vibrant part of the U.S. economy.
No. 2: Private equity is the principal source of high returns for pension funds. Don’t think about the Schwarzmans, Kravises and Rubensteins of the world when you think about making changes to the private-equity industry. Instead, think about the pension funds and the people with stakes in them.

Check out the article and read the blogs below to see just how misinformed smart WSJ readers can be.

Would You Invest in This Man?

Welcome to Guest Blogger - Ingrid Mida Masak.

In all the research I did this week, I am left with a tremendous sense of respect for Yves Saint Laurent and his revolutionary fashion ideas and proven business success. There are many lessons to be learned from the career of this talented designer:

1. A degree is not required.

Yves only attended the prestigious Chambre Syndicale school of haute couture for three months before quitting. He emerged as a promising young designer by winning the first prize for a cocktail dress design in a contest sponsored by the International Wool Secretariat. He was only 17 years old when he was hired by Christian Dior.
2. Be innovative.

YSL was one of the first to use couture as a laboratory. Although many of his design innovations endure today, he was not without his share of flops. As I mentioned yesterday, his introduction of street fashion in 1962, ie., the leather jacket for women, was considered a failure and resulted in his dismissal from the house of Dior. As well, he included knickerbockers in his collections more than once. During an interview on France-Info radio, his business partner Pierre Berge said "Saint Laurent was a true creator, going beyond the aesthetic to make a social statement. In this sense he was a libertarian, an anarchist and he threw bombs at the legs of society. That's how he transformed society and that's how he transformed women."
3. Failure can be the path to something bigger and better than you ever imagined.

After YSL was dismissed from Dior and conscripted into military service, he was hospitalized for depression and subjected to such horrors as electroshock therapy. Enduring the public humiliation of being fired and the shame of being in a mental hospital did not mean the end of Saint Laurent's career. Without this break from the house of Dior, it is conceivable that he might never have enjoyed the success that he did.
4. Know your strengths and find a partner whose strengths compliments your weaknesses.

Yves Saint Laurent was a true artiste - creative, sensitive, and fragile. Undoubtedly it was his partner Pierre Berge who was the mastermind behind the business success of the house. In 1966, the house of YSL opened the first ready-to-wear Rive Gauche boutique by a couture designer on the Paris Left Bank. This move was instrumental in the development of the idealogical shift that fashion was no longer just for the rich.These lessons are applicable not only to the big business of fashion but to the business of life.

In writing this post, I myself have learned about taking risks and living your dream. Merci Monsieur Saint Laurent! --

Posted By Ingrid M. to The Passionate Fashionista at 6/06/2008 08:42:00 AM