Need To Know

Here’s a brief rundown of some recent events and developments you may need to know:

• Proposed changes to FAS 157: On Aug. 28 the Financial Accounting Standards Board to Topic 820, formerly known as Rule 157, which governs fair value measurements under U.S. Generally Accepted Accounting Procedures, or GAAP, proposed changes to the accounting rule. Perhaps the most controversial of the proposals is one that would require buyout shops to provide a sensitivity analysis for so-called Level 3 assets in addition to fair market valuation. Basically this means firms would need to provide an alternative valuation based on another method of determining value, which could significantly complicate valuation procedures for private equity professionals. Deadline for comment on the proposed changes is Oct. 12.

• California scrutinizes placement agents: The California State Senate passed a disclosure bill that will affect how placement agents deal with government pensions. The bill requires placement agents to report any campaign donations to public pension board members that they made in the two-year period prior to soliciting investments from them. The rule also requires pension funds in the state to reveal when placement agents were employed to win investment business.

• Moulton’s lament: In a move that shocked the private equity industry, Jon Moulton ripped his colleagues and himself in a resignation letter to investors in his former firm, London-based Alchemy Partners LLP. The outspoken Mouton said he was unable to endorse his successor, Dominic Slade, and apologized to investors for some recent deals. “Together with my partners past and present, I made too many investment and people errors.”

• Strains show at Quadrangle: In what is perhaps a sign of more bad news to come, Quadrangle Group LLC reportedly informed investors on Sept. 11 that it plans to close its London office and that three principals are leaving the buyout shop. Firm executives said they were turning their attention to Asia instead of Europe. The changes can’t be good for morale at the New York-based buyout shop, which was dealt a blow earlier this year when founder Steven Rattner left to spearhead the government’s effort to save the auto industry, and who is now part of a wide ranging investigation over allegedly shady dealings with a politically connected placement agent.