Haha, are you an idiot? The sponsors, who will get zero in a liquidation, should throw away their equity option because you think the effort of a turnaround is too much hassle?

I still can't get over this comment, it's embarrassing. When you're finished with your IB stint and you're interviewing at a fund who has made a poor investment, bring it up, recommend that they liquidate the business, see if you get any offers.

Or talk to your LPs: "hi yea, we thought we'd throw your money away because we're lazy - so how about making it 3 and 20? you're redeeming your investment, what!?"

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

What?! You guys haven't bought HY RSH bonds. It's a lock (kidding).

AMZN is affecting everyone. Hell, WMT is expanding into financial processing. If that doesn't say something I don't know what does.

I'm on the pursuit of happiness and I know everything that shine ain't always gonna be gold. I'll be fine once I get it
 

Does Toys r Us own a lot of the real estate its stores are sitting on? If so that could be the deal angle. I remember when Eddie Lampbert bought into K-Mart even thou he had no interest in its retail business whatsoever. It was all about the massive RE holdings and it paid off very well for him, at least for a well. Seeing that Vornado is involved in this one, perhaps something similar is going on.

Too late for second-guessing Too late to go back to sleep.
 

Does Toys r Us own a lot of the real estate its stores are sitting on? If so that could be the deal angle. I remember when Eddie Lampbert bought into K-Mart even thou he had no interest in its retail business whatsoever. It was all about the massive RE holdings and it paid off very well for him, at least for a while. Seeing that Vornado is involved in this one, perhaps something similar is going on.

Too late for second-guessing Too late to go back to sleep.
 
Best Response

Management fees at the fund level are usually offset by monitoring fees. This was a boom-era deal, so not sure what the offset % was (maybe 50%?), but these days, management fees are offset 100% by monitoring fees.

It's a more efficient use of LP capital to take fees from the company vs. the fund (no capital call).

EDIT: Good question though

 

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