Hopefully Private Equity Will Put an End to This

[MRT144]

I just saw an ad for the Fantastic 4 car by Dodge. Dodge is a Daimler-Chrysler brand. A car that flies!

You're spending money to advertise a car that nobody will ever drive and only see in a movie? Unless the company that produced the Fantastic 4 payed for this entire ad (unlikely) you could have spent that money advertising a REAL car!

Gah!

[Dauphin]

I would saying it's a brand recognition advert. But Daimler and Chrysler are diverging anyway (as you allude to).

[MRT144]

Originally posted by Dauphin
I would saying it's a brand recognition advert. But Daimler and Chrysler are diverging anyway.

they need more than just brand recognition with chrysler. brand recognition isnt why they are hurting is it?

[Dauphin]

I have no idea. Hardly any cars here are Chrysler. Except maybe the PT Cruiser. Who made that one?

[Zkribbler]

Let's all go down to our local Daimler-Chrysler dealer and demand they sell us this car. Threaten discrimination lawsuits if they refuse.

[DRoseDARs]

And in other private equity news, China's seeks to buy a portion of your ass...

http://news.yahoo.com/s/ft/20070520/bs_ft/fto052020071440496895

Beijing to buy stake in Blackstone

By Francesco Guerrera in New York Sun May 20, 2:25 PM ET

The Chinese government is to use $3bn of its vast foreign exchange reserves to buy a 9.9 per cent stake in Blackstone, the US buy-out fund, in an unprecedented move that underlines Beijing's desire to tap into the private equity boom.

The investment will coincide with Blackstone's landmark $40bn stock market listing, expected in the next few months, and will allow the private equity group to nearly double its original target of raising $4bn.

Stephen Schwarzman, Blackstone's chief executive, hailed the deal - the first time Beijing has invested its foreign reserve in a commercial transaction - as an "historic event that changes the paradigm in global capital flows".

Under the terms of the deal, which is believed to have been agreed in just a few weeks, the Chinese government has taken the unusual step of giving up its voting rights associated with the stake in Blackstone.

The move appears aimed at defusing any US political opposition to the deal at a time of tension between Washington and Beijing over the renminbi.

The investment - announced on Sunday - will come through a new Chinese agency charged with managing part of the country's $1,200bn in foreign reserves.

The price of the stake to be sold to Beijing will be at a slight discount to the one paid by investors in the initial public offering. Beijing has also agreed to keep the stake for at least four years.

It is understood that China's foreign reserve agency has agreed not to invest in rival private equity groups for 12 months. A number of Blackstone's rivals, including Kohlberg Kravis Roberts, Texas Pacific Group and Apollo are exploring listings or private placings.

China's decision to buy a stake in Blackstone's IPO rather than in one of its buy-out funds, which are more volatile and risky, is a sign of Beijing's cautious approach to private equity.

The Chinese government has been looking to diversify its foreign exchanges reserves away from low-yielding US Treasuries.

However, buying into Blackstone's listed entity may deprive the Chinese government of some of the large returns earned by its buy-out funds.

In its prospectus, Blackstone warned that its priority was to return cash to the private investors in its funds, rather than to pay dividends to shareholders.

Over the past two years, private equity has been one of the best performing asset classes, as private equity funds have exploited favourable debt market conditions to buy ever-larger companies.

However, there are growing fears the private equity cycle may be nearing its peak, as takeover prices and debt levels reach record levels.