Private Capital Markets Blog

Week in Review: Microsoft, Fee Hogs, and Leveraged Loans

The short post-Labor Day week started with a boom with Microsoft announcing its acquisition of Nokia’s devices unit for $7.2 billion. Apparently Steve Ballmer has a few more moves to make before he steps down as Microsoft’s CEO, especially in the face of high competition from Apple and Google’s mobile units. It remains to be seen whether the mega-merger will actually work.

In other news, PE loves the hotel industry, monitoring fees are losing popularity, and Forbes released its top 50 dealmakers list this week.

Leveraged Loan Volume Soars to $8B as M&A Deals Emerge: According to the weekly leveraged loan volume, the Post-Labor Day Boom is in full force. This week, the U.S. leveraged loan market saw $8 billion in new issuance — significantly higher than the previous month —  suggesting that deals may be on the horizon.

The Death of Private Equity’s Fee Hogs: “Monitoring fees” are losing popularity. Only 18% of PE firms charged the fees in Q2-13, down from nearly 60% a year earlier. While the fiasco with Caesar’s may have brought the fees to popular attention, it is actually LPs that are driving the change.

Why the SBA Should be Abolished: The SBA has become extremely popular over the past few years. But, is that necessarily a good thing? According to Ray Hennessey, the SBA should be abolished because it funds bad ideas, subsidizes banks, puts taxpayers at risk, and a handful of other reasons.

Announced Transactions:

Opinions:

Thanks to James Marvin Phelps / Shutterstock.com for the photo.

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