SEC’s Proposed Ban
Officials at the Securities and Exchange Commission at deadline on Oct. 27 were still evaluating comments on the agency’s proposed ban on placement agents and were unclear as to when they would make a formal recommendation to the agency, according to a source familiar with the situation. The period for comment ended Oct. 6 and officials are combing through more than 230 submissions as they formulate their formal proposal. While comment periods typically last 30 to 90 days there is no set time period for the SEC to evaluate the comments.
TPG Returns Fees
TPG has told investors that it plans to return $20 million in fees paid on its $19 billion sixth buyout fund. The firm told investors about its plans at its annual conference this week, a source said, according to the Wall Street Journal. Investors originally committed about $20 billion to the TPG VI fund, but TPG later allowed them to reduce their commitments, a source told Reuters in December, which brought the size down to about $19 billion.
Sun Capital Shaves Fund Target
Sun Capital Partners offered to reduce its $6 billion fifth fund by $1 billion, ceding to limited partners that have been pushing the Boca-Raton, Fla.-based turnaround shop to trim the fund since last August, as first reported by peHub, a sister publication of Buyouts. The firm is keeping its 2 percent management fee, and it is unclear what will happen to management fees already paid.
KKR-Backed Capmark Financial Goes Bankrupt
Commercial real estate company Capmark Financial filed for bankruptcy, weighed down by declines in the sector and a heavy debt load related to its leveraged buyout by Kohlberg Kravis Roberts & Co., Reuters reported. The company, which was created out of the commercial real estate assets of General Motors’ finance arm, GMAC, in March of 2006, had indicated earlier this year that it might file for bankruptcy and was negotiating with lenders, bondholders and the Federal Deposit Insurance Corp. The move wipes out $1.5 billion in equity investments made by KKR, Goldman Sachs Capital Partners and Five Mile Capital, which were made as part of the company’s $8.5 billion carve-out. According to the bankruptcy filing, the group owned 75.4 percent of the company while GMAC, owned 21.3 percent. Employees and directors owned most of the remaining stock. KKR had already written down its investment in Capmark to zero earlier this year. It’s not the first failed equity investment for KKR this year: door maker Masonite, which KKR bought in 2005, filed for bankruptcy in March and has since emerged from court.