Word: buyouts
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Dates: during 2000-2009
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...Conservative cartoonist Michael Ramirez of the L.A. Times was fired recently, for example. Kallaugher, who has been with the Baltimore Sun since 1988, accepted a buyout offer from the Sun’s parent company, The Tribune Company, and will leave the paper this January...
...most important, demand from investors has skyrocketed, especially from pension funds, which means you might be invested in a buyout fund and not even know it. The long-term outlooks and multibillion-dollar purses of institutional investors have always made them a match for buyout funds, which lock up money for five to 10 years, promising a high return in exchange. These days, there's even more interest because "alternative investments," which also include hedge funds, are all the rage. Pension funds that used to invest, say, 2% of assets in those vehicles now go up to 10%, and smaller...
...reason? Hot results. According to Thomson Financial and the National Venture Capital Association, buyout funds returned 31.3% last year, scorching the 6.3% for the Standard & Poor's 500. Over time, though, buyout funds haven't provided the same premium. The annualized return for buyout funds over the past 20 years was 13.3%, compared with...
...action is attracting a host of new players. Investment banks, which retrenched after the tech bust, are ratcheting back up, as are money managers like financial-services firm Amvescap, which last week acquired WL Ross & Co., a buyout firm run by turnaround specialist Wilbur Ross. Even hedge funds--whose trader mentality is antithetical to buying and holding--are taking pages out of the buyout playbook. Hedge-fund operator Eddie Lampert not only bought and merged Sears and Kmart but also installed himself as chairman...
History says that when too much money chases the same asset class, things end badly. As the bids go higher and the deals get thinner, private companies carry ever greater debt. Four years ago, 41% of the payment for the average buyout came from equity and the rest from debt. Today the average equity level is down to 35%, according to S&P. That is still a far cry from the 7% equity levels of the original buyout craze, but the trend is nonetheless an indicator that the industry is starting to overheat. "That often happens toward...