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Power and Money

  Wednesday, 20 Jun 2007 | 10:47 AM ET

LBO Lawsuits: The Effect On Deals Like Ceridian

Posted By: Melissa Lee
Okay, let's say you're a shareholder in a company, and that company's just gotten a takeover bid from a private equity firm. That offer represented a 13.6% premium to the stock's closing price yesterday. You may think to yourself: I've got myself a nice little profit here. But wouldn't a 19.3% profit be that much nicer? No, I didn't pull those figures out from my fedora. That's the difference, according to Dealogic, between the average premiums in management-led buyouts versus non-management deals. And these days, shareholders are outraged by it, and bringing that rage to the courtroom. »Read more
  Tuesday, 19 Jun 2007 | 2:03 PM ET

Hot Hedge Fund Strategies: How To Get In!

Posted By: Melissa Lee
130/30, 120/20, 140/40. No, they're not prescriptions from your eye doctor. They are the latest trend in the investing world, that allows traditional, long-term investors to use shorting to boost returns. Very simply, the funds leverage up to 130% (or 120% or 140%, depending on the flavor of the strategy) long exposure usually to an index or sometimes a basket of stock picks. They then short 30% (or 20 of 40%), betting against the stocks they think are overvalued. And voila! 100% net exposure. »Read more
  Friday, 15 Jun 2007 | 10:14 AM ET

Steve Schwarzman: Too Rich or Not For Congress?

Steve Schwarzman's wealth probably makes a lot of people jealous. He is, after all, fabulously rich. And that would be FABULOUSLY, in all caps. If Blackstone goes public, Schwarzman will become even more fabulously rich, to the tune of $677 million additional dollars, on top of retaining a 23% stake in the firm. And if that doesn't make you jealous, there's that Wall Street Journal profile of Schwarzman this week, (subscription required) which details, among other things, his upper class sensitivity to a butler's squeaky black shoes, and his and his wife's fancy for $400 worth of stone crabs on weekends. »Read more
  Thursday, 14 Jun 2007 | 8:27 AM ET

Hedge Fund Rankings: CNBC's on Your Side!

Posted By: Melissa Lee
Every local TV news channel has some segment that helps some consumer in distress--someone wronged by a renegade dry cleaner who made a hole in a beloved cashmere sweater, or a pet owner who bought a mutt instead of a pedigree pure bred. Invariably, the segment is called something along the lines of "the Investigators," or "XYZ news channel On Your Side." This blog entry is my version of that regular feature on your local news. »Read more
  Wednesday, 13 Jun 2007 | 10:55 AM ET

Hedge Fund Con: What You Didn't See

Posted By: Melissa Lee
Twelve minutes seems like an eternity in television land, but when you report an in-depth piece, there is inevitably juicy tidbits that end up never seeing the light of day. That's what happened with my look at the psychology behind a hedge fund con. It's the story of a college undergrad, Hakan Yalincak, who engaged in credit card fraud, hedge fund fraud and check kiting, in a classic Wall Street swindle. And here's the kicker: the targets of the scam were hedge fund traders and managers who worked at some of the most successful... »Read more
  Wednesday, 6 Jun 2007 | 12:14 PM ET

SAC & Jana Turn Up the Heat!

Posted By: Melissa Lee
Imagine you're a CEO or board member of a publicly traded company and you get this letter, signed by two very powerful, very successful hedge funds: Dearest Sir, We believe you should make a huge acquisition because the company as it stands won't deliver the returns we want (I.E. not BIG enough!). By the way, we own a huge stake in your company, and we WILL make it bigger. (Read between the lines: Do what we say, or else.) XOXO, SAC and Jana. »Read more
  Wednesday, 30 May 2007 | 11:03 AM ET

Bigger is not Necessarily Better

Today, I focused on emerging private equity funds' outperformance versus larger, more established funds (see link to my CNBC TV report). But let's not forget about hedge funds. The same outperformance can also be found there.First a multiple-choice question: whom do you want running your hedge fund?A. A guy who's been running money for decades and has his wealth spread out across a big portfolio that may be worth more than yours may.B. A guy who's sunk almost all his net worth into the fund, so he's trading his own money, and stays up at night thinking about how he's got to make the fund work or he'll lose his house. »Read more
  Wednesday, 23 May 2007 | 10:11 AM ET

Hedge Fund Registration: No Silver Bullet

The effort to require hedge funds to register just doesn't die. After the court struck down the Securities and Exchange Commission's mandate to require registration, Sen. Charles Grassley picked up the torch. But Senator, consider the comments of the US Attorney for the State of Connecticut. »Read more
  Thursday, 17 May 2007 | 10:04 AM ET

Private Equity Targets and the $100B LBO

My, how things have changed... A matter of months ago, talk of the $100b leveraged buyout seemed rampant. In newspapers and on TV (and admittedly, on CNBC), there was prattle about private equity deals reaching gargantuan proportions. My friend and colleague Dylan Ratigan and I even had a bet going on how big the deals would get in 2007.And now, two big investment banks seem to be backing my side of the bet. Merrill Lynch, on a $100b buyout, saying: "the probability of such events occurring is less than generally thought." Morgan Stanley, meantime, saying a deal of that size would be "heroic." (Dylan, when can I collect my $5?) »Read more
  Friday, 18 May 2007 | 1:57 PM ET

Power & Money Special Report

Posted By: By CNBC.com
Private equity is reshaping the U.S. economy as well as its capital markets and is a force to be reckoned with. »Read more