Filed under: Financials and analyticals, Raising money, Investments, Value and lack thereof

Lehman Brothers Holdings Inc. (NYSE: LEH) has in effect set itself up for a future takeunder, or so its pricing and trading seems. The business itself has few proprietary operations, and all of its assets walk in the doors early in the morning and leave at night.

The investment banking and trading firm is raising approximately $6 billion to shore up its balance sheet. It is a solid amount of capital, but it is very bad news that the brokerage had to raise that much. Lehman’s loss for the last quarter is now reported as about $2.8 billion. Not so long ago, estimates were for that number to be $300 million.

That leaves Wall Street wondering what other firms are facing. It is hard to imagine Lehman’s losses could be eight times greater than expected without results being very poor at other firms trading and investment banking firms.

Lehman likely needs this capital because is still bleeding in the current quarter and may be damaged more through the rest of the year. The company might come out and state that it doesn’t need any more capital and that this is it, but we have heard that song over and over. In fact, on Wall Street 2008 may be the year of “Brother can you spare a few billion in change?” for major investment banks and lending institutions.

Most firms on Wall Street put money into the same mortgage paper, LBO loans, CDOs and CLOs, and other derivatives to one extent or another. Lehman’s shares traded at a 52-week high of $82.00. In mid-May, it was trading in the mid-$40’s. Lehman closed at $32.29 Friday. Shares are trading around $29.50 or $29.60 in pre-market after having traded around $28.00 in earlier pre-market trading.

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Filed under: The Blackstone Group, Raising money, The Carlyle Group, Madison Dearborn Partners, Engagements, Private equity industry

In a report (subscription required) out of the Dow Jones LBO Wire, Carlyle Group L.P. has delayed its deadline for the fund-raising efforts for its new Carlyle Partners V LP. The delay is stated to have been moved to the end of the year for it to shut on its fund raising efforts. Carlyle V’s original closing date was Might 30, and it received investor consent to extend the final closing date to Dec. 31 at the very latest.

Fund V efforts started in 2007 and was stated to have swiftly held an $8 billion first closing with a target of $15 billion and a hard cap of $17 billion.

Carlyle isn’t the first nor the only facing delays. The Blackstone Group L.P. (NYSE: BX) and Madison Dearborn Partners both delayed the closing of private equity funds earlier this year.

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Filed under: Raising money, Engagements, Private equity industry, Investments, Public or private?

Capital Trust, Inc. (NYSE: CT) has formed a new fund to invest in invest in “high grade” commercial real estate debt. This will include investment grade securities such as CMBS, REIT debt, and CDOs, as well as whole loans and participations therein.

CT High Grade Partners II, LLC with $667 million of commitments from two institutional investors.

This fund will be managed by CT Investment Management Co., LLC, Capital Trust’s wholly-owned investment management subsidiary.

This is actually a limited time car as well. CT High Grade Partners II has a one year investment period subject to extension by mutual agreement. Investments will be funded 100% with the investors’ capital utilizing no leverage and CTIMCO will earn a management fee equal to 0.40% per annum on invested assets.

Jon C. Ogg

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Filed under: Raising money, Texas Pacific Group

Back in the 1980s, David Bonderman was the chief dealmaker for Robert Bass, a Texan billionaire. He helped to structure the $550 million buyout of American Savings and Loan Association of California, which was caught in the S&L morass. It was a complex deal, requiring lots of negotiations with federal regulators. But it ultimately turned out to be a great investment. In fact, the bank became a car to finance other deals.

Well, Bonderman is coming back to the future. Now, as the chief of TPG, he’s one of the top players in private equity. And he wants to do some finance deals. To this end, he’s raising $7 billion for a financial service fund. The investments will range from minority stakes to control situations.

Actually, Bonderman has already been busy with bank deals. For example, he recently assembled the $7 billion equity infusion for Washington Mutual (NYSE: WM). He also approached Merrill Lynch (NYSE: MER) to do an investment, which, so far, hasn’t gone anywhere.

Yet, there are many financial institutions that need cash. Moreover, having TPG as a partner is usually a good thing.

As should be no surprise, it looks like TPG is getting traction on the capital raise, with commitments from the New Jersey Say Investment Council and the government of Singapore.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Raising money, Private equity industry

Prospect Capital Corporation (NASDAQ: PSEC) has announced it will raise funds in a public offering of three million shares of common stock, and Prospect will allow the underwriters a 30-day option to purchase up to an additional 450,000 shares of its common stock to cover over-allotments from underwriters.

The private equity and mezzanine finance company said that it expects to use the net proceeds from this secondary offering to repay outstanding debt, to fund investments in portfolio companies, and for general corporate purposes.

Citi and Wachovia are the lead underwriters, and Oppenheimer, and RBC Capital Markets are listed the co-managers of this offering.

Continue reading at 247WallSt.com to hear about the implications and how this compares to the overall size of the company.

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Filed under: Raising money, Texas Pacific Group, Private equity industry, Investments, Value and lack thereof

A new capital raise may have set a record, or at least close to it. Tygris Commercial Finance Group, Inc. has launched a new commercial finance company for middle markets transactions, and it says in the launch release that its funding is over $1.75 billion in equity commitments. Tygris states this is the largest initial capital raise ever in the U.S. commercial finance sector. Tygris will initially have offices in Chicago, Stamford, CT and Parsippany, NJ.

Tygris was founded by Aquiline Capital Partners LLC (”Aquiline”), a New York based private equity firm specializing in financial services, with New Mountain Capital, L.L.C. and TPG Capital joining as lead investors.

The company also claims to have established significant relationships with financial institutions including Deutsche Bank, Credit Suisse, SunTrust Robinson Humphrey, Barclays, Wachovia and Wells Fargo Foothill. With the backers and management team here on this, this seems like it is easily within the realm of contacts.

The Company initially will concentrate on developing leading franchise positions in three commercial finance businesses: middle market corporate finance, middle market equipment leasing and asset finance, and small ticket leasing.

Below is the management team, and unless I’m missing something it looks like an impressive list of executives:

• Frederick E. “Rick” Wolfert, former Vice Chairman of Commercial Finance of the CIT Group and President of Heller Financial Inc., is the Company’s CEO.
• Steven F. Kluger, EVP, Capital Markets and Corporate Strategy; former President/CEO of GE Capital Markets.
• Stuart A. Armstrong, President of Corporate Finance; former President/CEO of Black Diamond Commercial Finance, former Senior Managing Director and Head of Corporate Lending’s vertical industry financing groups at GE Commercial Finance.
• Laird M. Boulden, President of Asset Finance (Chicago); former President/CEO of RBS Asset Finance, and President/co-founder of the Commercial Equipment Finance Group for Heller Financial Inc.
• Tim J. Eichenlaub, EVP, Chief Risk Officer; former Senior Managing Director and Group Head for CIT’s Sponsor Finance business.
• T. Doug Hollowell, EVP, General Counsel and Head of Depository Strategy; former Executive Director at Morgan Stanley Corporate Treasury, and General Counsel at Merrill Lynch Capital.

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Filed under: Raising money, Investments

There’s some interesting financing news this morning, even if the financing isn’t one of large proportions in private equity, venture capital, or in sovereign-type investments.

An OTC-BB listed stock called ZAP! (OTCBB: ZAAP), a US-based electric automobile pure play, saw the completion of a financing pact this morning from Dubai-based The Al Yousuf Group. The total financing was a convertible debt placement in the amount of $475,000.00, but this is after the Al Yousuf Group purchased $5 million in ZAP! shares back in November.

The Al Yousuf Group is a manufacturing and distribution company in the U.A.E.

Read the full story at 247WallSt.com.

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Filed under: Raising money, Apollo Management, Private equity industry, Public or private?

Metals USA Holdings Corp. filed to come public this morning via an initial public offering. The company is taking the proposed ticker of “MUX” on NYSE. For filing purposes, it intends to sell up to $200 million in common stock.

The company is one of the largest metal service center businesses in the United States, and is a leading provider of value-added processed carbon steel, stainless steel, aluminum, red metals and manufactured metal components.

This is a private equity held company, and investment funds affiliated with Apollo Management, L.P. are the principal stockholders. Some proceeds will go to the company and some to shareholders, although those percentages haven’t been set. It also looks like the company will repurchase some or all of $300 million of senior floating rate notes with the proceeds.

Read the full story from 247WallSt.com.

Jon Ogg produces and edits the “10 Stocks Under $10″ newsletter and he does not own securities in the companies he covers.

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Filed under: Deals, Raising money, Merrill Lynch, Private equity industry, Value and lack thereof, Public or private?

Cumulus Media Inc. (NASDAQ: CMLS) has announced that the management-led investor group has terminated the planned merger agreement. While there was a glimmer of hope that this was going to be rekindled, the deal spread on this was so wide that a fleet of trucks could have driven between it.

Cumulus has agreed with the investor group led by Lew Dickey, its Chairman, President and CEO, and an affiliate of Merrill Lynch’s (NYSE: MER) Global Private Equity, to terminate the merger agreement which first came on July 23, 2007. The members of the investor group informed Cumulus that after exploring possible alternatives they were unable to agree on terms on which they could proceed with the buyout.

As a result of the termination of the merger agreement, the investor group has agreed to promptly pay Cumulus a merger termination fee of $15 million. In addition, the terms of the previously announced amendment to Cumulus’ existing credit agreement will not take effect. Cumulus had a market cap of $253.6 million based upon a $5.81 close on Friday.

The company has also announced that its board of directors intends to explore the possible implementation of a new stock repurchase plan in the near-term in order to provide liquidity opportunities to stockholders.

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Filed under: Deals, Raising money, Venture capital industry, Private equity industry

It appears that the world of porn is getting more attention from private equity and venture capital investors. And, no, it isn’t that private equity executives and deal makers are spending more time looking at porn than they are negotiating deals. (Well, maybe.) More importantly, a huge investor in the space has won an award and might be opening a floodgate of capital

AdultVest is a private equity venture that we covered on its launch earlier this year. The company concentrates exclusively on adult industry investments, mergers and acquisitions. So far, its initial numbers are pretty stellar.

It claims to have some $7.9 billion in “available capital” to invest in adult themed businesses, and $286 million of that was raised “within the last 7 days.” It also claims to have 3,809 registered investors, with 53 of those signing up in the last week. (This data is from the group’s homepage.)

The large news is that AdultVest was just selected by Substitute Investment News as one of four funds nominated for the “Hedge Fund Launch of the Year” award. And last month, the company announced it was acquiring iPorn.com.

Reading through the earnings release that Rick’s Cabaret International Inc. (NASDAQ: RICK) produced earlier this day, you might be tempted to conclude that adult entertainment is immune to a slowing economy. On the other hand, the incredibly poor current performance by Playboy Enterprises inc. (NYSE: PLA) might make you conclude that the gathering slowdown could hurt this sector.

There are a number of reasons that the investment community is trying to get into and make money from porn. The most obvious one is that you’re reading about it right here right now.

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