– Carlyle, Gávea/Apax and GP Investmentos raising new Brazilian PE Funds to invest in consumer products, healthcare and infrastructure.
–Oaktree entering direct lending in Europe, after the US on another chapter of credit hedge-funds stepping in for SMEs after banks scaled back lending.
– Nokia+/-Google+/-Microsoft and the ‘burning platform’ theory.
-Book covers: a set of Penguin and Pelican covers from 1935-2005.
As per today’s brilliant Dan PrimackTerm Sheet. J.P. Morgan’s Silicon Valley bankers have developed (and trademarked) a “high-tech version of mezzanine finance”.
Not enough information is public and it’s too early to understand but this is basically seems to be Silicon Valley’s version of mezzanine bridge financing designed to give an exit to “too eager to IPO” early investors/employees with guarantees adapted to the company’s business and development stage.
Considering that SurveyMonkey (the first issuer of SPL bonds) was founded in 1999 and actually generates significant cash (2012 Revenues of $113 million and Earning of $61millions) and probably has limited need for more investments – my guess here is that early investors/employees were costly to carry and were pushing for an IPO asap – the SPL bonds (a combination of cash-pay and PIK bonds) gave them an exit and reduced cost of debt.
The complex part here is how to price and negotiate the exit (I’m guessing warrants) and the guarantees (bondholders probably have some grip over SurveyMonkey’s future cashflow and in the case of the other SPL issuer Jawbones – the actual physical inventory). Other than that, the PIK bonds probably have a low penalty for pre-payment in the case of an equity offering and investors are also willing to ignore rules of thumbs like the max 1-1.5 xEBITDA (hit me if you have more info). All that probably demands a higher closing fee than the usual 2% and as Primack mentions “J.P. Morgan effectively has an inside track for the IPO business of both SurveyMonkey and Jawbone, not to mention for future debt and acquisition requirements.”
All in all – this seems to be an interesting remedy to EM companies – instead of extending/renegotiating over and over again bridge-loans till the IPO market is open again.
–The Rohatyn Group became one of the largest emerging-markets-focused private-equity funds in the world, with more than $7 billion in assets under management after it acquired Citi Venture Capital International from Citibank,
–Something Ventured – PBS’ brilliant documentary on early Venture Capitalists,
– Gladwell rephrases the Ten-Thousand-Hour-Rule:”…in instances where there are not a long list of situations and scenarios and possibilities to master—like jumping really high, running as fast as you can in a straight line—expertise can be attained a whole lot more quickly…In cognitively demanding fields, there are no naturals.”
-“I’ve done the calculation and your chances of winning the lottery are identical whether you play or not.” Fran Lebowitz, always on point,
– “and may you always remember that obstacles in the path are not obstacles, they are the path.”
– “The days are long gone when “emerging markets” could be seen as a single asset class”
-Hyperbole,hyperbole: “The Death of an Asset Class?” by Keynes’ euthanasia of the rentier, no less – by GMO’s James Montier
– “Google plans to make real-time translation devices that will translate language for simple conversation across language barriers.”
– Lisbon architect Nuno Simões’s series of staircases and walkways at an historic cave near Évora, Portugal (via Dezeen).
–“The best investment advice you’ll never get” via The Reformed Broker – also “don’t pay active fees for index-like performance.“,
-Japanese Banks (Mitsubishi UFJ, Mizuho and Sumitomo Mitsui) take the top three positions on Latin American Syndicated Loans Q1 2013 (Bloomberg league tables – page 8 here),
-How complex (and sometimes ineffective for foreign investors) collateral can be in Brazilian loans,
–The Strange Case of the Ukrainian politician/head of meat inspections/meat trader and how a significant part of the meat imported from Brazil to Ukraine ends in Russia.
-Distressed Investment/Restructuring – two of the most important reads that you can find on line : Wachtell, Lipton, Rosen & Katz’s Distressed Mergers and Acquisitions and Houlihan Lokey’s Buying and Selling the Troubled Company
-Something around $2.1 and $3.7 trillion will be invested in IT (roughly Brazil’s GDP and this is not including consumer spend) in 2013 according to either Forrester Research or Gartner – software is the bulk of spending and by 2014 Latin America will be where IT investment will be growing faster (via TechCrunch)
– Google’s design (a BBC video) from1998 till now.
Photograph: Stedelijk Museum Schiedam’s Rinus Van de Velde exhibition. Velde, The Lost Bishop.
-New regulation (and recapitalization) will bring “tremendous mispricing between the different levels of the capital structure” in Banks: Blue Mountain’s James E. Staley.
–Recent trends in Latin American High Yield Offerings,
-“Prepackaged Bankrupcy/Restructuring” in Delaware – “The Curious Case of the European Vodka Seller” by The New York Times,
– Last week: Mary Meeker’s Annual Internet Trends Report: mobile momentum,wearables and China -main slides mentioning Brazil below – mobile, mobile….,
– A brilliant review of one of Paris’ worst restaurants (via @GeorgesJanin) : ” Why do they continue to come here?….The only rationally conceivable answer is: Paris, Paris exerts a mercurial force field….it defies judgment.”
-“Overpay for the thing that is toughest to get” – Brooklyn Bridge Venture’s Charlie O’Donnell on the Tumblr deal.
–Frank Quattrone’s investment bank boutique Qatalyst Partners were the only bankers involved in the USD $1.1 billion deal.
-Ahead of tomorrow’s Bitcoin and the Future of Money talk, Wired UK guide to Bitcoin.
-“We want to traffic in areas where there is not a lot of capital chasing for returns”,
-“Hackers are the animals that can detect a storm coming or an earthquake…there are two big things hackers are excited about now: Bitcoin and 3D printing.”
-“Trust is good, control is better” – list of all Borgen episodes (with the opening quotes),
–This is probably one of the best, most subtle and intelligent reviews of Upstream Color, one of the most interesting films of the year.
– Credit/Debt trading Hedge-Funds expanding rapidly and Third point seeking an IPO for its reinsurance arm,
– How Broadcast (antenna) networks can rake billions by going cable-only by The Verge (in the US, not sure if this works for EM, specially Brazil),
-Following up on the series Brian Eno in Finance (first installment: Eno’s letter to Nassim Taleb via The Drunkeynesian) this is Eno talking to Cambridge University Economist Ha Joon-Chang,
– Cervante’s Ocho Comedias for $145,000 and a first edition of Raymond Chandler’s Big Sleep for $19,000: browsing Bauman rare books.
-“Do not put your hand in front of a train, that’s what the Internet (video,tv,cable) is…”
-Michael Milken and the corporate financing cube,
-Brazilian inflation-linked bonds are about 60 per cent of total EM inflation-linked bonds,
-Inside Amazon’s giant fulfillment center,
-Famous writers and their other jobs,
-Salmon Rushdie on moral courage.
Lockmann.org 