Toys R Us, iHeartMedia Haunt Buyout Firms Sitting on Trillion-Dollar Cash Pile

[laserhaas]

This discussion thread was locked as off-topic by muriel_volestrangler (a host of the Latest Breaking News forum).

Source: WSJ

It has been more than a decade since private-equity firms went on a buyout binge on the eve of the financial crisis, but as the recent bankruptcies of Toys “R” Us Inc. and iHeartMedia Inc. show, many of the deals continue to haunt their owners and are forcing them to find new ways to spend an epic pile of cash.

Private-equity firms are sitting on more than $1 trillion in uninvested capital, data provider Preqin estimates, which they will need to spend if they want to earn the hefty fees they collect on investment gains. Their problem: The most efficient way to put the money to work is on big deals, but the raft of failures of precrisis buyouts—including those of Caesar’s Entertainment Corp., Energy Future Holdings Corp. and now Toys “R” Us and iHeartMedia—shows how hard that is to do.

It isn’t just painful memories holding buyout firms back. Booming equity markets have stretched valuations, causing concern that potential deals won’t clear return thresholds. It is a problem Warren Buffett recently bemoaned. His Berkshire Hathaway Inc. has more than $100 billion in cash but faces a lack of reasonably priced assets to buy.

Read more: https://www.wsj.com/articles/toys-r-us-iheartmedia-haunt-buyout-firms-sitting-on-trillion-dollar-cash-pile-1521720000

---

If Senate, Congress or some judge or federal agent, finds the bald to do what is right, then the shake-up of Wall Street would be - extraordinary!

Just sayin......

Link to tweet

.

[laserhaas]

1. Truth is, the internet is making it harder for these guys, to steal

Bain Capital made its bones by massive grand larceny.

[democratisphere]

3. Let's see. I remember a guy by the name of Romney that had something to do with Bain Capital.

Of the Oligarchs, by the Oligarchs and for the Oligarchs.

[laserhaas]

6. There are no articles stating Mitt ever gave up ownership

Other than to his wife, in 2003

[democratisphere]

7. Therefore Romney is a closeted Oligarch who thinks he can become President

through the back door.

[laserhaas]

8. We've stopped him, before

Thrice!

[democratisphere]

2. Poor Warren Buffet. Ownership by the Oligarch few to wreck it for the masses.

drumpf and the American Oligarchs will have our entire economy destroyed in no time.

[Sherman A1]

4. Thanks for posting.

I recall a prediction that 2018 would be a much worse year in Retail closings that 2017. The debt load of the companies was cited as a major contributing factor. Certainly it is not the only one and there are many headwinds in the Sector, but if one is so saddled with debt that they cannot innovate, remodel and update, they are doomed to fail.

[laserhaas]

5. Truth is, Mitt's Bain Capital cares only for Bain Capital

They bleed and bleed until nothing is left

[Sherman A1]

10. Yup,

From every evidence that I have seen.

[KY_EnviroGuy]

9. What about if they grow a heart and invest that trillion into education.

Oh wait...that would be the wise, compassionate, long-term, minimal return thing to do.

I hear crickets from Wall Street.

......... ...........

[Spouting1horn]

11. That's exactly

what they should do. The shareholders - and certainly Warren Buffet - do not need that cash at all.

[cstanleytech]

12. The other problem is some investment firms buy something with no real intention

of ever investing the money they earn back into the business.
I know one of them loaned the business they bought money and then borrowed even more from other sources and then they behaved like a leech.
How?
Well they siphoned off the money the company was earning to repay first themselves rather than reinvest the money back into the company or pay the other loan holders and now the company is facing a 2nd bankruptcy.
The investment firm made a killing but the other loan holders are going to get screwed and the company is likely to completely fold now putting tens of thousands out of work.

[dembotoz]

13. What A sad day..no one's pension to destroy

[muriel_volestrangler]

14. Locking - the hosts feel this is analysis, rather than a breaking news story

about the cash that private equity firms have been sitting on for months or even years. Please repost in GD, Editorials, or the Economics group. Thanks.