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Unlike five months ago, when Washington Mutual Inc. last found itself in need of a deep-pocketed backer, private equity money didn't ride to the rescue this time. And with confidence in the bank flagging, banking regulators took over the thrift and sold its assets to J.P. Morgan Chase & Co. for $1.9 billion leaving private equity stakeholder TPG Capital with a steep loss on its investment.
In a statement a TPG spokesman said:
"Obviously, we are dissatisfied with the loss to our partners and ourselves with the investment in Washington Mutual. ... While this loss is extremely disappointing, we are well diversified across platforms, geographies and sectors, and this investment represents a very small portion of our assets."The failure of Washington Mutual deals a heavy blow to TPG, which led a $7 billion capital injection into the bank in April. TPG invested roughly $2 billion, and, according to a source, the private equity firm's own losses tally $1.3 billion, or 2.5% of the firm's assets under management. Luckily for TPG, it has nearly completed raising about $30 billion in new capital for three investment funds. The buyout shop raised an estimated $20 billion for its primary leveraged buyout fund, TPG Partners VI. Its also gathering $4 billion for an Asia-focused fund and ironically $6 billion for a distressed financial services vehicle. - George White See Dealscape post on J.P. Morgan acquisition See Dealscape post on TPG fundraising See Crisis on Wall Street Dealwatch CategoriesComments
From: JD Morris,
I still think TPG should have used Washington Mutual Inc. to buy all the bad debt penny on dollars. After working on Capital Hill for few years and Wall Street for many years, the government partnering with private equity player to clean house would have been best. Getting re-elected vs. saving the day is the Hills job. Resolution Trust Corporation (RTC) days are soon to here again! The billion $$$ plan needs to be in partner ship with turn around private equity shop and not the executives that caused the mess. Poor TPG get short end of the stick and bank exec. will get bonus to stay with our tax dollar. Private Equity, Hedge Fudns, and other can turning around the industry. 24 hr TV and people that want to get elected will result in RTC and you getting stuck with the bill! Our radio show "The Ideal Investment Show" covered this issue 6 months ago!
Posted on:
September 26, 2008 8:17 AM
From: Brock,
Christian - Your claim of "...give the bankers 700 billion of our money." is wrong. The money is being used to buy debt assets, for which will either be sold at a future date or held to maturity. No one is giving money away - this program is not like the "Rebate Cheques" which were handled out. Yes, taxpayer money was given back to taxpayers, however, not in proportion to what is paid by those in the highest tax bracket. That tax spent served little purpose. This will move debt off the Banks balance sheets, so that credit can expend. What this is is no different than RTC or the Chrysler Loan - both were profitable "bailouts". Funny, that spending for the "war" in Iraq is costing taxpayers close to 700 Billion and no one seems concerned with that tax spending.
Posted on:
September 26, 2008 11:37 PM
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I spoke to 40 people today in a department store... most of them were brainwashed however this one is the easiest one to overcome. Do you have debt? Wouldn't you like to be bailed out too?
Everyone but one told me hell yes I had a point. One was still so afraid she wouldn't have a job that she was supporting the plan to give the bankers 700 billion of our money.
We must overcome the main stream media. This would never even be considered if the alternative media was strong. We are planning a "Free The Press" bomb. We have a plan to take down the main stream media but we will need your support.
http://pyrabang.com/go/asylum