Crossroads

At the intersection of technology, finance and the Pacific Rim.

Tuesday, July 21, 2009

Questions

I got the following emails from members asking the questions below. My answers are in cap letters. Thanks to those who sent the questions. It is much appreciated.

I had several questions after studying PE.

1. Do private equity firms (KKR, BLACKSTONE .etc) inform investors of the target company before the firm start to invest ? In my thinking, this situation happens frequently. investors can get another opportunity. However, Is it insider trading? illegal. Is it correct?

IF A PE FIRM INVESTS IN A PUBLIC COMPANY IT IS A MATERIAL EVENT (IF LISTED IN USA AND MOST OTHER EXCHANGES) AND THEREFORE SHOULD BE DISCLOSED. SO AS SOON AS AN AGREEMENT IS SIGNED, THEY ARE OBLIGED TO DISCLOSE.

2. Whenever I read newspaper and journal, I heard just USA's private equity firm, Carlyle,KKR, BLACKSTONE. Is the reason their size is great? Are their any big and famous private equity fund in other country except sovereign fund?

WELL PE IS MAINLY US BASED BECAUSE US INVESTORS (LPS) HAVE BEEN THE MOST AGGRESSIVE IN INVESTING IN THIS ASSET CLASS. THERE ARE A FEW LARGER EUROPEAN FUNDS, BUT NOT OF THE SCALE OF KKR OR CARLYLE OR OR BLACKSTONE.

3. It is vague between PE and IB, nowadays. Maybe those have compatitive relationship or cooperative each other. Which one is more powerful and efficient? As far as I concerned, If I am investor, I will put my money into IB sectors because of more stable and secure....bank...

NOT AN EASY QUESTION--LIKE ASKING WHO IS THE BETTER ATHLETE--KOBE BRYANT OR RONALDO? BUT SUSPECT THAT GOLDMAN REMAINS AT THE TOP IN TERMS OF INFLUENCE--AFTER THAT IT IS HARD TO SAY. POWER DEPENDS ON WHERE YOU SIT--IF PE IS THE OWNER AND AN IB APPROACHES IT, THERE IS NO QUESTION ABOUT WHERE THE POWER AND INFLUENCE LIES.

One other person made the following comment:

After your recommendation on google reader, I found it very convenient!!

I registered investopedia, Financial Times, Private equity news and Reuters.

Some of them require fee-charging subscription.

If any, would you please recommend other internet news papers from which I can have more reliable private equity news?

TRY THE DEAL BLOG OF THE NY TIMES, FTALPHAVILLE, AND PE EQUITY HUB. EASIEST IS JUST TO TYPE "PRIVATE EQUITY" INTO GOOGLE READER AND LET IT SEARCH FOR THE MOST POPULAR SITES/BLOGS. KNOWLEDGE IS GETTING AWFULLY ACCESSABLE--THE INTERNET IS LIKE KNOWLEDGE VITAMINS--HIGHLY CONCENTRATED IF YOU KNOW HOW TO USE IT.



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