Wednesday, August 29, 2007
Independent Equity Research Acquisitions & Consolidation
Independent Equity Research Acquisitions & Consolidation
Shanny Basar, 23 Aug 2007, Financial News US Online
Reuters has agreed to buy StarMine as equity analysts at buyside institutions are ramping up their use of independent research. StarMine, a San-Francisco-based firm, was established in 1999 by Joe Gatto who developed a quantitative model to track analyst estimates and recommendations. Its rankings help fund managers decide whose research to buy although sellside firms are also clients.
Earlier August, John S Herold, a research firm covering the oil and gas sectors, was acquired as investment banks such as Goldman Sachs have been linking up independents. In January 2007, Goldman Sachs launched Hudson Street Services, an alternative research platform. As part of Goldman’s strategy, it takes minority stakes in the firms included in Hudson Street who retain their own branding.
Shanny Basar, 23 Aug 2007, Financial News US Online
Reuters has agreed to buy StarMine as equity analysts at buyside institutions are ramping up their use of independent research. StarMine, a San-Francisco-based firm, was established in 1999 by Joe Gatto who developed a quantitative model to track analyst estimates and recommendations. Its rankings help fund managers decide whose research to buy although sellside firms are also clients.
Earlier August, John S Herold, a research firm covering the oil and gas sectors, was acquired as investment banks such as Goldman Sachs have been linking up independents. In January 2007, Goldman Sachs launched Hudson Street Services, an alternative research platform. As part of Goldman’s strategy, it takes minority stakes in the firms included in Hudson Street who retain their own branding.
More Analysts 4 Independent Equity Research, Commissions Remain Same
Independent equity research gains users, but commissions remain static
24 Aug 2007, Hedge Week
Equity analysts at buy-side institutions in the US appear to be increasing their use of independent research, according to a new study from Greenwich Associates, but the institutions are not increasing the amount of commission paid out to third-party research providers.
Among equity analysts interviewed by Greenwich Associates as part of its 2007 US Equity Analysts Research Study, almost 40 per cent say they expect to increase their use of products and services from independent or 'boutique' research providers. However, commission payments to independent research providers do not appear to be increasing in absolute dollar terms.
Read the full story from here at Hedge Week
24 Aug 2007, Hedge Week
Equity analysts at buy-side institutions in the US appear to be increasing their use of independent research, according to a new study from Greenwich Associates, but the institutions are not increasing the amount of commission paid out to third-party research providers.
Among equity analysts interviewed by Greenwich Associates as part of its 2007 US Equity Analysts Research Study, almost 40 per cent say they expect to increase their use of products and services from independent or 'boutique' research providers. However, commission payments to independent research providers do not appear to be increasing in absolute dollar terms.
Read the full story from here at Hedge Week
Mid Market Bank Jefferies Expands Equities Research Team
Mid Market Bank Jefferies Expands Equities Research Team
Stephanie Baum, 28 Aug 2007
Jefferies has hired two senior equity analysts as the mid-market bank continues to expand its research teams.
Jefferies takes a sector-based approach to equities research and has added several staff this year. In April, two professionals joined Jefferies from Bank of America as co-heads of healthcare sector trading. In the second quarter, two more moved over from Credit Suisse to focus on utilities, metals and mining. And now, another two additional senior analysts have joined the firm.
Read more from this report @ Financial News Online
Stephanie Baum, 28 Aug 2007
Jefferies has hired two senior equity analysts as the mid-market bank continues to expand its research teams.
Jefferies takes a sector-based approach to equities research and has added several staff this year. In April, two professionals joined Jefferies from Bank of America as co-heads of healthcare sector trading. In the second quarter, two more moved over from Credit Suisse to focus on utilities, metals and mining. And now, another two additional senior analysts have joined the firm.
Read more from this report @ Financial News Online
Valuations, M&A and the Private Equity - Corporate Dance
Corporate valuations & the Private Equity - Corporate Dance
Knowing how much to pay for a company was never easy - and the rise of private equity hasn’t helped
Charlotte Moore, Financial Director, 24 Aug 2007
Among the many forms of financial wizardry, valuing companies is a dark art. It combines complex financial skills with the ability to predict the future; it’s an unusual amalgam of statistics and crystal ball gazing.
In this scenario, the entry and growth of private equity firms has enlivened the market even further. Many publicly quoted companies are finding that they lock horns ever more frequently with private equity giants like Blackstone and KKR as their fiscal firepower has increased over the past decade.
Talk to any corporate finance practitioner and the message is resoundingly clear: private equity has shaken up almost every aspect of the M&A market, including the way that acquisitions and disposals are valued...
Read more this report @ Accountancy Age how the corporates and private equity companies are fighting it out in the M&A scene.
Knowing how much to pay for a company was never easy - and the rise of private equity hasn’t helped
Charlotte Moore, Financial Director, 24 Aug 2007
Among the many forms of financial wizardry, valuing companies is a dark art. It combines complex financial skills with the ability to predict the future; it’s an unusual amalgam of statistics and crystal ball gazing.
In this scenario, the entry and growth of private equity firms has enlivened the market even further. Many publicly quoted companies are finding that they lock horns ever more frequently with private equity giants like Blackstone and KKR as their fiscal firepower has increased over the past decade.
Talk to any corporate finance practitioner and the message is resoundingly clear: private equity has shaken up almost every aspect of the M&A market, including the way that acquisitions and disposals are valued...
Read more this report @ Accountancy Age how the corporates and private equity companies are fighting it out in the M&A scene.
Interview with Paul Taylor @ Motley Fool - On Peter Lynch & More
Interview with Paul Taylor @ Motley Fool - On Peter Lynch & More
By Charly Travers August 28, 2007 @ The Motley Fool
The Fool's Charly Travers recently had the opportunity to conduct a Q&A with Paul Taylor of Taylor Investment Services. Paul is a longtime poster on the Fool's Liquid Lounge discussion board, currently posting under the name IncrementalGuy. Read on to see what Paul had to say about his investment philosophy, superior returns, and things the beginning investor should keep in mind.
While there are many nuggets you will take away from the interview, one answer stands out, in my opinion:
"Travers: What's the secret of your success?
Taylor: This could be a long answer, but suffice it to say that I do my best to mimic the approach described by Peter Lynch in his books One Up on Wall Street and Beating the Street.
"
Interesting questions and answers, useful read
Read the full interview here @ Motley Fool
By Charly Travers August 28, 2007 @ The Motley Fool
The Fool's Charly Travers recently had the opportunity to conduct a Q&A with Paul Taylor of Taylor Investment Services. Paul is a longtime poster on the Fool's Liquid Lounge discussion board, currently posting under the name IncrementalGuy. Read on to see what Paul had to say about his investment philosophy, superior returns, and things the beginning investor should keep in mind.
While there are many nuggets you will take away from the interview, one answer stands out, in my opinion:
"Travers: What's the secret of your success?
Taylor: This could be a long answer, but suffice it to say that I do my best to mimic the approach described by Peter Lynch in his books One Up on Wall Street and Beating the Street.
"
Interesting questions and answers, useful read
Read the full interview here @ Motley Fool
Doubts re Discounted Cash Flow (DCF) as Valuation Tool
Doubts re Discounted Cash Flow as a Valuation Tool
The discounted cash flow is not an effective valuation tool for commodity (capital-intensive) industries.
The article says that a lot of retrospection is done on the widely accepted valuation tool DCF (discounted cash flow), similar to what PEG (price-earnings to growth) ratio, which was in vogue for valuing technology stocks during the boom of 2000 and 2001, went through in the recent past.
It goes on to add that while there is nothing wrong with the tool itself, its current indiscriminate usage in many sectors like commodities, say in valuing refinery stocks, power generation companies (in this case, depreciation is pass through in nature since the ROEs are capped) etc makes many professionals wary about its use.
Read more from this report @ Business Standard India, Aug 29, 2007
The discounted cash flow is not an effective valuation tool for commodity (capital-intensive) industries.
The article says that a lot of retrospection is done on the widely accepted valuation tool DCF (discounted cash flow), similar to what PEG (price-earnings to growth) ratio, which was in vogue for valuing technology stocks during the boom of 2000 and 2001, went through in the recent past.
It goes on to add that while there is nothing wrong with the tool itself, its current indiscriminate usage in many sectors like commodities, say in valuing refinery stocks, power generation companies (in this case, depreciation is pass through in nature since the ROEs are capped) etc makes many professionals wary about its use.
Read more from this report @ Business Standard India, Aug 29, 2007
Friday, August 17, 2007
Private Equity Funds & India Infrastructure - PE Deals in Infra Sector
PE funds & India Infrastructure Story
Aug 2007
For the first time, India has crossed China in terms of PE investments in the first six months of 2007. According to data from the Centre for Asia Private Equity Research, India has seen $3.7 billion worth of private equity investments, just behind Japan, which saw $4.91 billion worth of PE funding in the same period, and ahead of People’s Republic of China, which saw investments to the extent of $2.6 billion during the first half of 2007.
It is estimated that engineering and construction companies attracted 11 such deals worth $290 million between January and May 2007.
The nature of infrastructure investments presents challenges to the PE investment funding. Infrastructure projects are characterised by high initial set up cost, long project tenors and returns spread over a large number of years. More importantly, the funding requirements for a typical greenfield infrastructure project are of a very different nature compared to typical PE investments.
Typically, PE funds prefer to channelise their funding in this sector through construction or development companies implementing such projects, rather than the projects itself.
Read more from this report @ Economic Times, India
Aug 2007
For the first time, India has crossed China in terms of PE investments in the first six months of 2007. According to data from the Centre for Asia Private Equity Research, India has seen $3.7 billion worth of private equity investments, just behind Japan, which saw $4.91 billion worth of PE funding in the same period, and ahead of People’s Republic of China, which saw investments to the extent of $2.6 billion during the first half of 2007.
It is estimated that engineering and construction companies attracted 11 such deals worth $290 million between January and May 2007.
The nature of infrastructure investments presents challenges to the PE investment funding. Infrastructure projects are characterised by high initial set up cost, long project tenors and returns spread over a large number of years. More importantly, the funding requirements for a typical greenfield infrastructure project are of a very different nature compared to typical PE investments.
Typically, PE funds prefer to channelise their funding in this sector through construction or development companies implementing such projects, rather than the projects itself.
Read more from this report @ Economic Times, India
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