Major Milestones in VC Land

I like VC’s more than private equity professionals, so I feel really bad about this.

We are in the middle of a historic drought - we have not witnessed a VC-backed IPO in 6 months, although 26 VC backed companies are in registration to go public. But until the small and mid cap style boxes get back on their feet it is going to be tough going for them, and is impacting other parts of their biz as well - namely funding new deals.

Check out Mark Heesan of the National Venture Capital Association lay it all out:

New Bull Market? Bankers Come Out of Hiding as Rosetta Stone Files IPO

Is this a new bull market? Apparently Francois Trahan of ISI Group thinks so:

Many will argue that this is just an oversold rally, the likes of which we have seen several times. We would argue this one has different characteristics. It is the first rally in quite some time in which high beta or high-leveraged stocks are in a leadership mode. This is a sign that investors are willing to take on of risk....A turning point in leading indicators changes everything for financial markets. Indeed, it is usually the point at which we see a trough in appetite for risk and the point where cyclical sectors of the market show signs of life while defensive segments go out of favor. ISI Group

ISI clients who heeded Jeff DeGraaf's technical call to stick with stocks for a bear market bounce (which would be nearing an end according to his original timeline) will now have to decide if Trahan will fumble the handoff or if he is indeed driving the bus.

Bankers are wasting no time in taking advantage of the resurgent animal spirits, and we have a deal coming, courtesy of the fine folks at Morgan Stanley and William Blair:

Better Luck Next Year, Private Equity

It is that time of the year; awards for dubious achievement are being handed out all over Wall Street, and of course this year is special. While Hedge Fund of Funds might score top honors in this year's Hall of Shame, Private Equity was not far behind.

Reneging on deals and begging for bailouts was preordained by Jeremy Grantham last summer:

August 2007
Much hand wringing is now taking place over the consequences for private equity if a severe credit crisis were to occur. But the scary point I’m trying to make is that profit margins for companies owned by private equity will come back down under pressure from normal capitalistic competition. With or without a credit crisis, their geese are cooked.

Yes, the state of private equity is not much of a surprise. But it is rather amusing to see Andrew Ross Sorkin underemployed, and his heroes of yesteryear eating shit sandwiches near daily. Cerberus is pathetic, kinda like three "Old Yellers" joined at the hip...and The Deal is taking dead aim at tres doggies:

Partnership from Hell: Private Equity and Paulson

The media fell under the spell of Private Equity in early 2007; CNBC's breathless coverage of the Blackstone IPO pretty much marked the top.

But I was more in Dan Loeb's camp - he does not hold them in such high regard, and unloaded on the industry at one of its very own confabs (roughly 20 months ago):

During an informal question-and-answer session, hedge fund manager Daniel Loeb—seated in the audience—began to criticize private equity firms for hoarding profits that rightly belong to public shareholders. While some attendees may have agreed privately with Loeb, those dinner guests well accustomed to the sanguine navel-gazing of business conferences were taken aback. In the pantheon of audacious acts, Loeb’s behavior was akin to wearing an NRA T-shirt to a peace rally.

But it was clear by the summer of that the salad days of PE were over. Every two-bit blogger jumps on Jeremy Grantham pronouncements now, but few did 18 months ago when he stuck a fork in the industry:

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