Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Top Image Systems Ltd. (TISA) -- Ignore unavailable to you. Want to Upgrade?

To: Harry J. who wrote (354)	11/30/1999 1:00:00 PM
From: Harry J.	Read Replies (1) \| Respond to of 436

I decided I'd find my own answers to my questions about Charterhouse Group. Here's what I found from public sources -- On Charterhouse itself - "Charterhouse Group International, Inc. is a leader in private equity investing that was founded in 1973. Charterhouse currently manages $1.6 billion in equity through several limited partnerships. Over its twenty-six year history, it has completed more than eighty transactions in a variety of service and industrial businesses . . ." -- Source: PR Newswire, November 8, 1999 (copyright PR Newswire Association, Inc.) The latest limited partnership is Charterhouse Equity Partners III which closed in early 1998 with about $1 billion to invest. Source: Buyouts, October 26, 1998, headline - Charterhouse Targets Publicly Traded Stakes, byline - David Snow (copyright Securities Data Publishing) Also, a Charterhouse principal's comments on group philosophy - "Over the last year and a half, Charterhouse Group International, a group that until recently has been known primarily for its buyout investments over the last 20 years, has made several investments that more closely resemble venture capital deals. [snip] While [Managing Director Thomas] Dircks notes that his firm has considered itself a private equity group rather than a buyout firm, he does admit that Charterhouse has been pursuing and completing far more deals that resemble capital investments in the last two years than it had prior to this period . . ." -- Source: Buyout, August 16, 1999 (copyright Securities Data Publishing) On the more general concept of equity investing in lieu of buyouts with a mention of Charterhouse's philosophy, see these quoted extracts from - Copyright 1999 Securities Data Publishing - "BuyOuts" - January 25, 1999 HEADLINE: Whatever Happened to the Leverage in LBO? BYLINE: David Snow "When it comes to growing a company, you can't have too much liquidity. But how about when you're trying to show a return on a buyout fund? As the amount of equity going into deals increases, buyout professionals are lauding the positive effects the trend will have on a portfolio company's financial stability and sustained growth. What they are less eager to talk about is the effect that less leverage is having on returns. "According to data from Portfolio Management Data, L.L.C., the equity piece in buyout deals is steadily growing. In 1988, for instance, an average deal used 9.7% equity. In 1998, that percentage crept from 31.1% before Labor Day to 34.2% afterwards, and even higher in the fourth quarter. [snip] "Among those who accept the trend to more equity in a deal, but may not exactly be ecstatic about it, are the general partners at buyout firms. Growing a business, they say, is much more feasible when you don't saddle it with debt. Merril Halpern, chairman and chief executive officer of Charterhouse Group International, says he feels no nostalgia for the days when companies could be bought with as little as 5% down. Mr. Halpern says it is now not unusual for his firm to put between 35% and 50% equity into a deal, with the average being around 30%. Charterhouse does some deals with no leverage at all, he says, such as when investing in an Internet company. "[Buyouts quoting] "You need to be sure you're not paying higher multiples, which is not easy," Mr. Halpern says. "You need to be very creative." [end Buyouts quoting]" [snip - end of Buyouts extract] What's it all mean? I dunno for sure, and my opinion's probably not worth much because I don't do this for a living. But since I keep my food money separate from my stock market money, I think I'll just sit back and watch. 8-) Regards, Harry J.