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☆ Banks' internship and analyst programs could be in flux, and that might spell bad news for senior dealmakers
▼ + stars: | 2023-03-27 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

But before we get started, First Citizens BancShares has agreed to buy Silicon Valley Bank, according to a statement from the FDIC. Some of the ripples from the fall of Silicon Valley Bank have felt particularly significant (Credit Suisse bankers nod ominously). Some banks had to even break a cardinal rule of Wall Street: Turn away business. Click here to read more about how college students are feeling on edge about their upcoming Wall Street jobs and internships. You don't necessarily need seven-figures in assets to call it quits, per The Wall Street Journal.

The remainder was equity checks by the private equity firms. Typically, debt accounts for between 60% and 80% of the deal consideration, allowing the buyout firms to juice returns. REFINANCING RISKTo be sure, a handful of private equity firms have already been accustomed to this kind of refinancing risk. An upside to the shift toward equity financing, dealmakers say, is that the companies owned by the private equity firms have more cushion to absorb losses if their business deteriorates. Many of the leveraged buyouts that became bankruptcies in the wake of the 2008 financial crisis were the result of private equity firms saddling companies with debt to the hilt.

LONDON, March 23 (Reuters) - Credit Suisse (CSGN.S) bondholders are seeking legal advice after the Swiss regulator ordered 16 billion Swiss francs ($17.5 billion) of Additional Tier-1 (AT1) debt to be wiped out under its rescue takeover by UBS (UBSG.S). Not only did bondholders expect protection, but UBS is paying $3.23 billion to Credit Suisse shareholders. One Paris-based manager of a debt fund that held Credit Suisse AT1s said he had been "spammed" with emails from lawyers. Facing any challenge could be Credit Suisse, its new owner UBS, Swiss regulator FINMA or the Swiss government. It also cited an emergency March 19 ordinance which it said authorised FINMA to instruct Credit Suisse to write off the bonds.

☆ Spooked dealmakers scurry back into their foxholes
▼ + stars: | 2023-03-23 | by ( Jeffrey Goldfarb | ) www.reuters.com time to read: +8 min

NEW YORK, March 23 (Reuters Breakingviews) - Jonathan Kanter, a lawyer by training, has become something of a magician. Pay closer attention, however, and Kanter is methodically rewriting a decades-old regulatory playbook. Last year, these breakup charges reached their highest level in a decade, at an average 4.5% of deal prices. The Department of Agriculture partnered with the DOJ on the case, another feature of Kanter’s plan of attack. As legal weaknesses emerge, dealmakers should be in position to better structure transactions and defend themselves at trial.

"There is a brick wall in front of M&A activity," said Anu Aiyengar, global head of M&A at JPMorgan Chase & Co (JPM.N). "We are in for choppiness," said Scott Barshay, chair of the corporate department at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. And it's a giant struggle because there's a lot of dry powder for the equity part of private equity deals. Dealmakers, however, said they expect the impact from the banking crisis on broader M&A activity to be contained, as most of the worst affected regional banks are not major advisers or lenders on deals. The technology sector remains the best hunting ground for corporate acquirers or private equity financiers, deal advisors said.

LONDON, March 21 (Reuters) - Distressed debt investors and large hedge funds are buying up Credit Suisse (CSGN.S) additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank's rescue by cross-town rival UBS (UBSG.S). AT1 bonds issued by other European banks tumbled on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of this type of debt. Buyers have included a mixture of hedge funds and deep distressed debt funds, which Southey expected would need to hold the bonds for an extended period before they paid off. Some of those buyers intend to join groups that would litigate to improve odds on cashing in on the bonds, Southey said. "It's quite possible that we will see demand from buyers of subordinated bank debt to have more explicit protections written into these bond prospectuses in the future."

Employees have been working around the clock to onboard as many startups as possible in the wake of the implosion of Silicon Valley Bank. Silicon Valley Bank, which had more than $175 billion in deposits and served nearly half of US VC-backed startups, was taken over by US regulators on March 10. "That said, I am worried that this bias towards a Big Four bank is a double-edged sword," Shekar added. "SVB did not think like a big bank. They could understand your operating plan when a big bank would balk at it," Ashley Tyrner, CEO and founder of FarmBoxRX, told Insider.

HONG KONG, March 17 (Reuters) - Chinese private equity firm DCP Capital aims to sell its Singaporean portfolio firm MFS Technology, which makes flexible printed circuit boards, for at least $550 million, two people with knowledge of the matter told Reuters. The sale is targeting primarily financial sponsors, but also strategic buyers, according to the two sources and a separate person with knowledge of the transaction. BDA Partners and Jefferies are advising DCP on the sale, the sources said. The Chinese firm bought a controlling stake in MFS in 2018 from Navis Capital Partners and Novo Tellus Capital Partners for an undisclosed amount. Reporting by Kane Wu in Hong Kong and Yantoultra Ngui in Singapore; Additional reporting by Julie Zhu in Hong Kong; Editing by Kenneth MaxwellOur Standards: The Thomson Reuters Trust Principles.

☆ Leaked email: Ex-Tiger Global dealmaker John Curtius offered to mortgage home to provide cash to founders fearful of missing payroll during SVB crisis
▼ + stars: | 2023-03-16 | by ( Callum Burroughs | ) www.businessinsider.com time to read: +2 min

Former Tiger Global partner John Curtius offered to mortgage his house during the SVB crisis. Curtius offered founders interest-free loans to help them meet payroll before depositors were guaranteed. Former Tiger Global partner John Curtius offered to mortgage his home to help portfolio founders meet payroll at the height of the Silicon Valley Bank crisis, according to a leaked email seen by Insider. The investor didn't give further detail about the mortgage or his house on the email seen by Insider. Since leaving the New York-based hedge fund, Curtius has spent time trying to secure capital for his new fund Cedar Investment Management.

☆ Everything you need to know about a crazy weekend in the wake of Silicon Valley Bank's failure
▼ + stars: | 2023-03-13 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

It's all about Silicon Valley Bank going down and the knock-on effects. If you're not up to speed, here's a quick rundown on what the hell happened at Silicon Valley Bank. The US Treasury, Federal Reserve Board, and the Financial Deposit Insurance Corporation announced they would "fully protect" all depositors who had funds in Silicon Valley Bank. Regulators also made one thing clear with their announcement: "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." Nobel Prize-winning economist Paul Krugman has a new name for Silicon Valley Bank.

☆ AI might revolutionize how we borrow money. But is that a good thing?
▼ + stars: | 2023-03-09 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

But a recent report by Credit Suisse on the use cases for both ChatGPT and AI in finance caught my eye. AI models are only as good as the data they receive, which leaves them susceptible to bias, just like humans. A top-performing hedge fund is looking to team up with one of the hottest tech tools. Izzy Englander's Millennium Management told clients that it'll expect to get paid regardless of whether the hedge fund actually makes money for its investors, according to Bloomberg. The billionaire hedge fund manager believes all signs are pointing towards a recession.

☆ M&A bankers trip over their cracked crystal balls
▼ + stars: | 2023-03-08 | by ( Liam Proud | ) www.reuters.com time to read: +7 min

The M&A pipeline generally has three components: announced deals that are almost certain to happen; announced deals that may not get over the line; and deals that have neither been announced or perhaps even conceived. Reuters GraphicsThere’s a much tighter relationship between equity markets and M&A, implying that CEOs pursue corporate marriages when their share prices are high. One common way to get around this problem is to look at the value of announced deals as a percentage of total worldwide market capitalisation. WEAKNESS IN NUMBERSUnsurprisingly, given all the uncertainty, some bankers take their pipeline estimates with an appropriately large pinch of salt. Reuters GraphicsFollow @liamwardproud on TwitterCONTEXT NEWSCompanies announced $3.6 trillion of mergers and acquisitions in 2022, according to Refinitiv, compared with $5.7 trillion in 2021.

☆ Elizabeth Warren leads cavalry into deal battles
▼ + stars: | 2023-03-07 | by ( Jonathan Guilford | ) www.reuters.com time to read: +3 min

It would be the third curious regulatory intervention in recent weeks, each encouraged by Democratic Senator Elizabeth Warren. In a September letter to Transportation Secretary Pete Buttigieg, Warren argued that the DOT should use its own tools, specifically in the Spirit situation. UnitedHealth (UNH.N) beat back a federal lawsuit against its plan to buy Change Healthcare; Facebook owner Meta Platforms (META.O) shrugged off an FTC attempt to stop its purchase of fitness app developer Within. JetBlue says it built time for a lawsuit into the Spirit merger agreement. As the senator charges up the competition cavalry, dealmakers may have to redraw their battle plans.

☆ Private equity firms lend less as demand cools
▼ + stars: | 2023-03-03 | by ( Chibuike Oguh | ) www.reuters.com time to read: +4 min

The amount of loans disbursed by direct lenders so far in 2023 has not shown any pickup, the Refinitiv data shows. Also weighing on deal volumes is the cost of borrowing from private equity firms. This has dampened demand for loans from private equity firms. For their part, private equity firms have also become more risk-averse when it comes to lending, as the economic slowdown and sticky price inflation erode the credit worthiness of some borrowers. To be sure, major deals using private equity firms as lenders are still getting done as banks have continued their retrenchment from risky debt.

☆ 9 deals that could shape US sports betting this year, as pent-up demand for M&A could bring operators like Fanatics back to the negotiating table
▼ + stars: | 2023-03-02 | by ( Ashley Rodriguez | Lucia Moses | ) www.businessinsider.com time to read: +5 min

Sports-betting insiders say there's pent-up demand for M&A in the industry after dealmaking slowed to crawl last year. That may mean fewer media and other deals that don't offer a clear return on investment or cost efficiencies.. That may mean fewer media and other deals that don't offer a clear return on investment or cost efficiencies. One thing we may see less of this year is operators looking to bring their entire tech stacks in-house, like when Bally's acquired Bet.Works and PointsBet bought Banach Technologies. Here are nine potential deals industry insiders are watching in 2023, and how they could shake up the industry:

☆ The 22 executives running BlackRock's pivotal $318 billion alternatives business, from private-equity power players to decarbonization dealmakers
▼ + stars: | 2023-02-28 | by ( Rebecca Ungarino | ) www.businessinsider.com time to read: +2 min

BlackRock's $318 billion alternative-investments business is key to the money manager's future. The money manager has been on a mission to grow its $318 billion alternatives business. The leadership team steering the alternatives business has changed recently. Insider has pinpointed the key people responsible for the alternatives business today. It was updated in February 2023 to reflect new reporting and changes to the leadership of BlackRock Alternatives.

☆ Goldman doubles down on the wealthy, as it should
▼ + stars: | 2023-02-28 | by ( Lauren Silva Laughlin | ) www.reuters.com time to read: +7 min

Instead, he indicated that the wealth business would be a “key driver for growth." One key pillar of that plan is Goldman’s alternative assets business, which includes running buyout, private credit and real-estate investing funds. For example, Goldman plans to take $2 billion in management and other fees from the alternative business next year. Last year, of the $72 billion Goldman raised for alternative, a third of that came from its wealth business. Goldman has dabbled in this now-dubbed “One Goldman” concept before, and gave it significant airtime on Tuesday.

☆ Private equity is finally stepping up its tech game. Here's who is leading the charge.
▼ + stars: | 2023-02-24 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +5 min

What's the first thing that pops into your head when you hear the term "private equity?" PE firms do plenty of things quite well (and they are certainly compensated for their work), but their internal tech has never been a top priority. What I find most fascinating about the so-called "digitization" of PE isn't so much the actual tech but the culture. Click here to learn more about the 12 executives helping PE firms get up to speed on cutting-edge tech they can use to source and close deals. Silicon Valley Bank, which is the go-to bank for tech startups, is under pressure amid the market downturn, the Financial Times reported.

This would help its investment bankers in their pitches to clients, especially for IPOs, one of the sources added. Klein is selling his business to Credit Suisse for $175 million, the two said earlier this month. Credit Suisse will focus on managing money for the wealthy after the carve-out. A spokesman for Credit Suisse declined to comment, as did a representative for Klein. Credit Suisse reported its biggest annual loss last year since the financial crisis and cut its bonus pool by 50% for 2022.

☆ China publishes rules to revive offshore listings
▼ + stars: | 2023-02-18 | by ( ) www.cnbc.com time to read: +3 min

China's securities watchdog published rules on Friday to regulate offshore listings, reviving foreign initial public offerings (IPOs) by Chinese firms after a regulatory freeze imposed in July 2021. Daniel Tu Active Creation CapitalUnder its new filing system, which effectively ends decades of unregulated overseas IPOs by Chinese companies, the CSRC will vet offshore listings. Friday's rules, amending a December draft, stipulate that overseas listings should not jeopardize China's national interests. Chinese offshore listings ground to a halt after Didi Global Inc's New York listing in June 2021 that triggered Beijing's regulatory backlash over data security concerns. China's tech crackdown also contributed to a near freeze in overseas listings by Chinese companies.

☆ Buyout barons reach deep into their bags of tricks
▼ + stars: | 2023-02-15 | by ( Jonathan Guilford | ) www.reuters.com time to read: +7 min

NEW YORK, Feb 15 (Reuters Breakingviews) - Debt necessity is proving to be the mother of private equity invention. With the cheap borrowing that fueled record-breaking years of leveraged buyouts gone, firms are digging deeper into their bags of tricks. Private equity firm Silver Lake, which bought a stake alongside the IPO, said it might take control. Besides putting private equity firms into weaker negotiating positions, the competing incentives also threaten conflicts of interest with limited partners. ...THERE’S A WAYIf the U.S. Federal Reserve avoids engineering a recession, private equity should be able to revert to its tried-and-true formula soon enough.

NEW YORK, Feb 15 (Reuters) - JPMorgan Chase & Co.'s (JPM.N) head of trading sees China as its largest potential overseas market as the bank aims to expand its international business. "China is by far the biggest opportunity for us," Troy Rohrbaugh, JPMorgan's head of global markets, told investors at a conference. Jamie Dimon, JPMorgan's chief executive officer, told Reuters in an interview last week that he was planning to visit the country. Meanwhile, debt and equity capital markets were faring better than expected despite concerns about an economic slowdown. JPMorgan's fixed-income revenue climbed 12% to $3.7 billion in the fourth quarter, fueled by rising revenue in rates, currencies and emerging markets.

☆ The Rainmakers: Meet the 20 powerhouse bankers who orchestrated the biggest deals of 2022 and defied a down market
▼ + stars: | 2023-02-15 | by ( Carter Johnson | Alex Morrell | ) www.businessinsider.com time to read: +3 min

Insider partnered with the financial-data platform MergerLinks to identify 2022's top 20 bankers. The ranking is based on bankers who led the advisory process for the largest M&A in North America. Insider partnered with MergerLinks, a financial data service that tracks deals, to present the fourth edition of "The Rainmakers," the 20 M&A bankers who orchestrated the largest deals in North America in 2022. Just two of the top 20 bankers work at a non-bulge bracket; in 2021 and 2020, that figure was seven apiece. The list below is in ascending order of the total value of deals led in 2022.

Tata Group, which regained control of Air India last year after decades of public ownership, put out just six paragraphs. "Air India negotiated hard and the team is very sharp despite having no prior aviation experience. A second person who watched the billions fall into place said the Air India negotiators were "methodical, tough and very sophisticated". Plans for announcements on the anniversary of Tata's Air India takeover slipped as engine talks wore on. Analysts caution many obstacles remain to Air India's plans.

☆ Does anyone want to stay in investment banking these days?
▼ + stars: | 2023-02-10 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

Banker salaries will get you in first class, but the potential total comp at PE firms and hedge funds will get you flying private. PE firms have been known to grind through people, but nothing quite compares to life at an investment bank. An investment bank's analyst program remains the go-to route to get your foot in the door on the Street. Click here to read more about salaries being offered by top PE firms to 2024 associates. All kidding aside, this deep dive by ProPublica is a fascinating look into how investment firms are helping the ultrarich save on taxes.

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