Filed under: Management, Raising money, Engagements, Venture capital industry, Private equity industry

Some scandals wreck public figures on Wall Street, while others act as mere speed bumps. It looks like the latter is true for Frank Quattrone, one of the most influential investment bankers in the 1990’s who was also the head of the Credits Suisse (NYSE: CS) technology banking group.

Frank Quattrone has just announced that he and some former colleagues are launching a new financial services venture called Qatalyst Group. Qatalyst will be a technology-focused merchant banking boutique headquartered in San Francisco, CA.

Qatalyst Partners, its investment banking business, will provide high-end merger & acquisition and corporate finance advice to technology companies. Its investing business, Qatalyst Capital Partners, will make selective principal investments, typically alongside leading venture capital and private equity firms.

Qatalyst Partners notes in its release that it will provide “high quality, independent advice to the senior management teams and boards of the technology industry’s established and emerging leaders on strategic matters crucial to their growth and success.”

Qatalyst will combine a broad network of relationships with deep sector knowledge and seasoned M&A expertise. In addition to merger & acquisition advice, Qatalyst Partners will also advise companies on capital structure and capital raising alternatives, and will selectively raise private capital for clients.

While it will not engage in public securities research, sales, trading or brokerage, Qatalyst Partners may participate as advisor or underwriter in clients’ public offerings.

It looks like Wall Street just got a new technology boutique that’ll be involved in venture capital, private equity, and bringing companies public.

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Filed under: Home, Ripoffs and Scams

Remember the 80s? Gold was about $300 an ounce and every tiny girl had some pretty tiny flimsy gold jewelry. The way I remember it, my aunts and uncles’ default all-occasion gift was a little locket or pendant. I was not a fussy little girl, and I often ended up with tangles of fragile gold chains in a pretty box.

If I’m to believe the people behind My Gold Celebration, I should run, not walk, to my parents’ home and unearth that pretty box and its handfuls of tangled Christmas and birthday gifts. The idea: you buy a kit from the internet site, only $699.50 (!!!) will get you a digital scale, a gold tester (the “GXL-24 Pro evaluates the gold karatage in the common 6 to 24 karat range used in the jewelry industry. This will assist you in determining the gold purity”), the My Gold Celebration book. Oh, and a magnification loupe, so you can feel like a real pawn shop owner.

With gold at $1,000 per ounce, it seems like such an obvious concept: melt the once-cheap and broken stuff down, get cash. But it turns out you don’t have to throw a party or use vastly expensive equipment to weigh your scrap jewelry down; a competing gold recycling service, Gold Kit, will send you an envelope for free — according to the internet site, they’ll send you a check immediately.

There’s no telling which of these services provides you the better value for your junky jewelry ounce. But I’m leery of any money-making concept with that much sparkle and upfront cost. Books should not cost $59.50, unless they’re text books, and we all know why those are so high-priced. If you think the concept of having a party where everyone makes money is great, by all means, gather your friends together and have ‘em bring their gold, grab a kitchen scale and have someone take the result to a refinery. But this just makes way more sense as a easy act of recycling than a shindig. [Update: Tom Barlow has a great set of considerations before you sell your gold.]

Or you could get a pickup truck and go around the neighborhood picking up scrap metal, like my husband’s friend, Jose. It’s not nearly so glamorous, but I bet you’d make just as much money.

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Filed under: Retire, Ripoffs and Scams

In case you haven’t watched anything other than HGTV for the past few days, the once-proud investment banking giant Bear Stearns has collapsed, going from $150 a share to $6 in less than a year.

Of course, top executives will be fine. But today’s Wall Street Journal reports (subscription required) that the deal for the firm to be acquired by JPMorgan Chase for $2 per share will cost many employees their jobs — and their retirement savings. Bear Stearns employees own about one-third of the company, and have seen their shares lose more than 90% of their value.

Of course my heart goes out to the Bear Stearns employees, but this is getting to be a familiar tale: company goes bust and workers are hit with a double whammy: no more job, worthless 401(k). Remember the video of the Enron human resources representative telling employees they should put their entire 401(k) in Enron stock?

Here’s how I look at it: As an employee, your future is already bound tightly enough to the future of your company. If the company prospers, your job will be secure, you’ll be in line for raises/promotions, and your resume will be improved by the recognition of your employer’s great success.

With your retirement money, you should be looking to diversify away from your exposure to the company — Since your job is probably your biggest supplier of wealth, you don’t need to own a large amount of stock in the company too.

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Filed under: GS Capital Partners, Private equity industry

While Goldman Sachs Group, Inc. (NYSE: GS) managed to beat earnings handily, there’s a key metric for private equity investors. That metric isn’t that Goldman Sachs beat greatly lowered earnings targets nor that shares are up 8% after earnings.

Goldman Sachs noted that it ranked first in global mergers and acquisitions for its fiscal year to date. But there was a key drop in investment banking revenues. Its $1.17 billion in revenues in the investment banking segment were 32% lower than the first quarter of 2007 (year over year) and were down 41% from the fourth quarter of 2007 (sequentially). That signals a slower annual trend but an even slower trend in the near-term has occurred.

More specifically, its net revenues in Financial Advisory Services were $663 million, down some 23% from the first quarter of 2007, reflecting a decrease in industry-wide completed mergers and acquisitions. Its net revenues in its Underwriting segment were $509 million, 40% lower than the first quarter of 2007. On that it notes significantly lower net revenues in debt underwriting, due to a decrease in leveraged finance and mortgage-related activity in difficult market conditions.

The bad news is that is not showing any immediate reprieve in the arena of private equity lending, nor in the number of mergers. The good news is that we should have already known this. There is a giant de-leveraging transition happening on Wall Street (and Main Street for that matter). This might be the new norm for the time being.

2006 and 2007 were more fun to cover the M&A frenzy, but the deals started getting stupid. This is not at a all the death of of private equity nor will it be the death of M&A. The billionaires might have to make more normalized acquisitions from here on out, and they might even even have to use mostly their own money.

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Big rate cut expected from Fed, but will it stem the tide?
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Wizard Academy Press’ New Book on Marketing to Women, ‘The Soccer Mom
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Euroshares bounce back in opening deals; all eyes on Fed rate decision
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