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| Mid-market private equity firms are playing down the impact of increasing competition for fund raising, and touting their greater scope for acquisitions than larger rivals reliant on higher levels of debt. "I wouldn't say it's an easy fund raising environment, but the mid-market players should find it slightly easier than the larger buyout funds," said Neil Sneddon, a director in the private equity funds team at British asset manager F&C. |
| (Source: Reuters, 2008-10-16) |
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| The U.S. Treasury's pledge to inject $250 billion into banks may coax private-equity leaders Stephen Schwarzman, David Rubenstein and Henry Kravis to resume investing after more than a year spent mostly on the sidelines. The founders of Blackstone Group LP, Carlyle Group and KKR & Co. LP told investors that the biggest government intervention in the financial system since the 1930s will help attract private capital to lenders. |
| (Source: Bloomberg, 2008-10-17) |
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| Smaller banks and credit unions have long argued they are the best place for the people of Main Street who need personal or small business loans. Their pitch is especially relevant now amid the global credit crisis that has shaken many big banks as they hope the federal bailout bill will restore liquidity to the market. |
| (Source: Orlando Sentinel, 2008-10-21) |
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| President Bush's announcement that the Federal Deposit Insurance Corp. will temporarily do away with its insurance caps and cover all deposits in non-interest bearing accounts was a measure aimed straight at Main Street. But critics say the step doesn't address the most critical problem threatening small businesses: slow sales and a sluggish credit market. |
| (Source: CNNMoney.com, 2008-10-14) |
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| As venture capital funds have moved upstream, doing larger deals, angel investors are being pitched by much more established companies. Now it's not just first-time entrepreneurs or those whose companies are in their infancy who are winning cash from angels, although those entrepreneurs are still pitching. |
| (Source: BusinessWeek, 2008-10-17) |
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| As it becomes increasingly difficult to cash out of their previous investments, venture capitalists are gradually closing their financial spigots in what could be the start of a long, dry spell for entrepreneurs. Although a drought hasn't set in yet, it's looking inevitable as the ripple effects of a worldwide financial crisis rattle venture capitalists. |
| (Source: San Francisco Chronicle, 2008-10-20) |
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| Even the most conscientious business owner can run into situations where income fails to cover operating expenses. The challenge is even greater during an economic downturn.
Small business owners need to have more cash on hand than they did in the past because of the credit situation, said Mark Allen, business development specialist at the Bloch School of Business and Public Administration at the University of Missouri-Kansas City. |
| (Source: The Kansas City Star (free reg. req'd), 2008-10-17) |
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| The maximum contribution that can be made to 401(k) and other defined contribution plans will increase next year, and the maximum benefit that can be funded through defined benefit plans also will rise in 2009, the Internal Revenue Service announced. The maximum annual contribution an employee can make through salary reduction to a 401(k) plan will rise to $16,500 from $15,500, while the maximum annual co-called catch-up contribution that employees age 50 and older can make to 401(k) and certain other defined contribution plans will rise to $5,500 from $5,000. |
| (Source: Business Insurance, 2008-10-16) |
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| Venture capitalists raised 5.5 percent less money from institutional investors in the third quarter than they did in the same period last year, the National Venture Capital Assn. said. Investors including pension funds and endowments put $8.12 billion into funds that invest in start-up companies, compared with $8.6 billion a year earlier. |
| (Source: Los Angeles Times (free reg. req'd), 2008-10-14) |
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| Volkswagen AG won a U.S. appeals court ruling that sets new guidelines on where it can be sued over allegations of defective parts, a decision that also could limit patent lawsuits in an east Texas town. The case has been closely watched by companies and patent lawyers who claim that Marshall has become a hub of litigation because patent owners win in a majority of cases. |
| (Source: Bloomberg, 2008-10-13) |
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| Steve Humke |
John Thornburgh |
SPACs and PIPEs – The ABCs of Financing
As a result of current market conditions, we're seeing some creative thinking at work in two types of financing strategies. A special purpose acquisition company, or SPAC, is a public company investment created through an equity IPO. SPACs are generally referred to as "blank-check companies" or companies without sales, earnings or a specific product. Instead the entity is formed with the sole purpose of raising capital to acquire a business at some point in the future using either cash or capital stock exchange.
PIPEs, or private investment in public equity, are often excellent financing options for small to medium sized public companies. PIPEs are generally preferred over secondary offerings because of their relative efficiency in time and expense and because there are fewer regulatory issues associated with the SEC. PIPEs usually fall into one of two categories: traditional and structured. Stock is issued at a set price in a traditional PIPE while a structured PIPE issues convertible debt through either common or preferred shares.
To learn more about the complexities associated with these financing options, contact a member of the Firm's Private Equity and Venture Services Practice Group.
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| Mark Barnes |
Alyssa Beattie |
Protecting Your Financial Accounts in Tumultuous Times
With all of the current turmoil in the financial markets, many people are wondering about the safety of their savings and investment accounts. The federal government, through a system of insurance programs, offers some security, and in the last 30 days that security has been expanded and increased on a temporary basis.
Read a brief overview of the dollar amount and other limitations of these programs.
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| Joe DeGroff |
Companies, Investors and the SEC Strive to Keep Up
For those like me who tend to be somewhat challenged when dealing with rapidly changing technologies, ponder for a moment about how large companies, institutional investors and government are also trying to keep pace. To be sure, the pace of change is increasing as companies, investors and government regulators embrace – or at least accept the reality of – access to information at company Web sites and the growing use of SMS or text messaging, RSS feeds, message boards and blogs.
Read the entire article.
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November
November 5 - Council for Resource Development's 2008 Annual Conference
November 6 - Indiana Chamber of Commerce's 19th Annual Awards Dinner with Newt Gingrich
November 7 - IBJ's Influential Women Event
November 13 - Keep Indianapolis Beautiful's 2008 A Monumental Affair
November 19 - Ice Miller Labor Seminar: Re-Engineering Indiana's Workforce
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Ice Miller has been active in the private equity industry for over 25 years, representing both management teams building great companies and the private equity firms and individuals that invest in them. We have extensive experience with all types of funds (formations and operations); mezzanine and senior secured financings; leveraged buyouts, roll-ups, build-ups, and consolidations; divestitures and exits; and complex litigation on behalf of investors and privately financed companies.
Read the complete profile of the Private Equity and Venture Services Practice Group.
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