Oracle CEO Larry Ellison. The third-richest man in the U.S. might be a buyer for AEG.
It looks like Larry Ellison, CEO of Oracle and number three on the latest Fortune 400 list of the richest Americans, may join the bidding for AEG, the entertainment and sports conglomerate that was recently put up for sale by multibillionaire owner Phil Anschutz.
Ellison's arrival on the bidding scene, when is being managed by the investment bank Blackstone, isn't exactly a surprise. He has shown and interest in sports teams in the past and has been involved with the America's Cup yacht race. In 2010, he bought a tennis professional tennis tournament held each year in Indian Wells.
If, as Reuters reports, his interest is legitimate, he joins a host of potential bidders, including Patrick Soon-Shiong, the richest man in Los Angeles, Guggenheim Partners (a subsidiary of which bought the Dodgers earlier this year for more than $2 billion), and private-equity firms, including Los Angeles' Colony Capital and Mitt Romney's old firm, Bain Capital.
The Romney/Ryan campaign has rolled a new website that promotes Romney's business achievements.
The Mitt Romney/Paul Ryan campaign has added an entire subsection to its website: business.mittromney.com. It's essentially a shrine to Romney's record — the successful part — at Bain Capital, the buyout/private-equity firm he started out of Bain & Co., a consultancy.
The sub-site features a number of turnaround and investment tales (more turnaround than investment, actually), including Staples — which obviously has a strong L.A. presence — and Santa Ana-based GT Bicycles.
The GT Bikes part of the story is interesting. On the Romney campaign's website, former CEO Mike Haynes appears in a video (see below) explaining how much good Bain Capital did for the business. Haynes, then the company's CFO, ascended to the CEO chair after GT's co-founder, Richard Long, was killed in a motorcycle accident in 1996. He was joined by Geoffrey Rehnert, who took on the Chairman's job. Rehnert was a co-founder, with Romney, at Bain.
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The California Public Employees' Retirement System in Sacramento, California. The fund may severely cut back its venture capital investments.
CalPERS, the gigantic California public workers' pension fund, has announced that it's going to to review the venture-capital component of alternative investments in its $230-billion overall portfolio. This follows on the heels of a much-discussed paper put out by the Kauffman Foundation earlier this year, in which the organization — which is devoted to promoting entrepreneurship — revealed that its VC investments has seriously underperformed in the past decade.
I wrote a feature about this in May. In January, CalPERS announced that it made only a 1.1-percent return on its investments, missing its target return of 7.75 percent by a wide margin. One of the reasons it in alternative asset classes like VC in the first place is that it can't meet its return objectives otherwise.
The fundraising aspect of being a VC has gotten pretty challenging. Some VCs seem to be adapting to this "new normal," while others appear content to live at the top of the pile and uses their brand-name status to vacuum up most of the available money. But they all rely on large funds like CalPERS to fuel their efforts to find the next Google or Facebook.
A couple of weeks ago, Guggenheim Partners was an under-the-radar funding source for Magic Johnson and Stan Kasten's successful marquee campaign to buy the L.A Dodgers. Just a $125-billion private firm in a world of much bigger fish. Goldman Sachs has almost a trillion in assets under management. Morgan Stanley has over $800 billion. Guggenheim hangs out in much lower reaches, with other broker-dealers in the realms below the exalted heights of major Wall Street investment banks.
Under CEO Mark Walter, however, Guggenheim is moving aggressively to break out of this mold and distance itself from shops like MF Global, the bankrupt broker-dealer that former Goldman CEO Jon Corzine was trying to bring into the big leagues — before a failed bet on European debt and some possibly illegal maneuvers with client money sent the firm into bankruptcy (and could send Corzine to jail).
Photo by Qfamily via Flickr Creative Commons
Is this a match for Starbucks in California?
There haven't been any actual Dunkin' Donuts stores in California since the 1990s, but that's all about to change. This isn't you father's Dunkin' Donuts. This is a whole new, amped-up, recently IPO'd and private-equity enabled Dunkin' Donuts. Not a cheerful place to stop in for a delicious coffee and and sticky ring of fried dough, but Starbucks worst nightmare.
Dunkin' Donuts, which has become something of a hipster alternative to 'Bucks, has almost no presence west of the Mississippi. However, following its $400 million initial public offering last year, it's putting itself under pressure to grow. Understandably, given that it's stock price has bumped along in a narrow trading range since its successful debut (it came out at $19 and has lived reliably above that ever since). But it's trading at 100 times earnings (not unusual for a newly IPO'd company), which means that investors are expecting this sucker to go someplace.