Now that it looks like Cerberus backed Chrysler will make it through Q1 of 2009, you have to wonder if the firm will take the time to update its website.

Despite generating more than a few headlines in 2008, the last news item on Cerberus’ News Releases and Public Statements page is a July 18th, 2007 note outlining some prepared remarks by John Snow to the National Press Club.

Although Cerberus is known as one of the more press shy private equity firms out there, a well crafted public statement on Chrysler probably could have been useful.

Either way, I wonder if we’ll see any news releases in 2009 . . .

It’s no surprise advanced education is fairly common up and down the professional ranks of most private equity firms. Whether it’s an MBA, JD, or even the PhD, you’ll find plenty of representatives.

The most popular advanced degree in the private equity world certainly has to be the MBA, but how common is it?

Scanning available title and bio information within Private Equity Database yields the following;

So while getting your MBA can’t hurt as you move up at the firm, the good news for those that decide against further business schooling, is that you still have plenty of company . . .

The lines between venture capital and private equity firms are generally pretty clear.  Afterall, the needs and resources demanded by new companies are distinctly different than those required by more established or mature businesses.  Given the differences, you don’t typically confuse a pe firm for a vc group, and vice versa.  However, despite the general venture capital private equity divide, there is a small but distinct set of firms engaged in investing across company stages.

Not sure what you’d call these firms, other than some sort of hybrid investor, although investment firm Technology Crossover Ventures (TCV) uses the firm name to spell it out for potential prospects.

Other hybrid investors such as Battery Ventures keep things simple for interested parties by breaking out portfolio holdings based on investment stage.  Battery lumps investments into one of three categories, including “Seed/Early”, “Expansion”, and “Private Equty”.  Battery is somewhat unique, (even amongst hybrids) as it targets opportunities across the entire spectrum of company stages (literally), willing to commit as little as a few hundred thousand for seed opportunities on the one side, to considering distressed situations on the other.

Hybrid firm Summit Partners doesn’t break out its portfolio companies as cleanly as Battery, however Summit does separate its varying investment products and breadth of range, willing to commit as “little as $5 million to more than $800 million of combined equity and debt per company”.  Summit is somewhat unique in that in addition to providing venture capital and private equity funding, the firm also can commit junior capital.

Despite all the different hybrid strategies, one similarity amongst hybrid investors is that most tend to be specialist firms, with an unsurprising emphasis on technology.

So while the venture capital and private equity worlds both remain pretty crowded without a whole lot of differentiation amongst each, firms that are able to bridge the gap without a seeming preference for either, at least offer a perspective few others can match.

It’s been reported that Bain Capital is inching closer to buying Reed Elsevier’s Business Information unit (RBI) for around $1 billion.  That’s over a $1 billion less than some of the initial bids Reed received for RBI earlier this year when the sales process began.  In February, both strategics and other private equity firms took interest before general nervousness over the economy and a lofty purchase price scared off suitors.

However, despite all the distractions, RBI actually improved both top and bottom line numbers in the first half of ‘08, seeing revenue of £484 (US$726) million in Q1 and Q2  of ‘08 vs £445 (US$668) million in ‘07, and operating profits of £62 (US$93) million in ‘08 vs £55 (US$83) million in ‘07.  While things have certainly changed since the summer, RBI’s overall performance (and a rising dollar) must’ve been a positive sign for Bain.

Either way, a successful close would mark a favorable sign for private equity (at least on the buyside) and m&a in general, as new deals start reflecting reasonable valuations and terms.

Update: Now it sounds like Reed’s getting cold feet.

The WSJ is reporting that The Carlyle Group is shuttering its Menlo Park office and cutting back on its global workforce by laying off 10% of its 1,000 employees.  The annoucement states that the cuts are a reflection of reduced m&a activity but more specifically, reduced activity in terms of large going private transactions which have all but disappeared.

The Carlyle Group is certainly one of the larger firms out there in terms of assets under management with the latest tally at $91.5 billion spread across four different disciplines.  However, with a total of 1,000 employees operating out of 33 global offices (eight in the US alone), it’s no wonder they all can’t be busy.  Similar sized Blackstone also has approximately 1,000 employees, however roughly 200 of these work outside of direct investing, and in their financial advisory group.

What’s interesting is that despite the cuts, Carlye’s career page is still up.

Warren Buffet famously states in Berkshire’s annual report that all he needs is 5 minutes before giving a yes or no on whether he’s interested in pursuing a transaction.  Not to discredit Mr. Buffet, (whose patience and track record is another story), but his quick judgment is also shared by many private equity pros.

Most firms plainly state in simple terms the types of businesses that interest them, and it doesn’t take much effort, analysis (or discussion) to determine if there’s a match.

So does your business fit the general private equity acquisition profile for new platform investments?  Based on general observations perusing firm websites, and setting aside (but not discounting) size, sector, and valuation considerations, see below commonly shared business characteristics many private equity firms prefer;

1. “Strong management”

Not sure why firms typically specify “strong” when it comes to management.  Afterall, who wants (or would admit they want) “incompetent” business leadership.  Bottomline, (and whichever way you want to describe it), most private equity firms prefer management to come with the business.

2. “Low capital intensity”

Private equity firms don’t like to spend the profits, so if your business does, and does so significantly just to stay competitive (let alone grow), let’s just say this doesn’t help.

3. “Diverse customer base”

Customer concentration is a definite deal killer.

4.  “Growth potential”

Whether organic or through add-ons, some sort of growth is preferable.  Operating in a sizeable and growing industry is certainly part of the story.

5. “Profitable”

While some private equity firms look for turnarounds, most don’t.  The more consistent your company’s earnings, the better.

Other notables include;

“Recurring revenue”

Firms love predictability.  Similar to the note on consistent earnings above, if your revenue numbers make for easy Excel model creation, firms notice.

“Defensible market position”

Private equity firms are more interested in leaders versus followers, so if your company is consistently re-acting to competitor moves or outside market forces, this is something you’ll need to answer.

“Mission-critical product/service”

Given the current economic climate, this characteristic is probably more in demand now than ever.  Many private equity firms specifically seek out businesses that provide products or services that are vital to other companies.

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Please note that the above characteristics are just meant to serve as a guide.  If your business doesn’t fit the descriptions, this isn’t to say firms will quickly pass.  Bottom line is, most businesses won’t match all of the above and every transaction situation is different (eg. valuation/industry/size are major, not to be overlooked factors). However, if you want that 5 minute initial yes/no answer, matching all (or none) of the criteria above will certainly help.

While Detroit preps for another visit to Washington and a second attempt at a bailout, LA meanwhile is hosting its annual auto show.  The Big 3 are in their usual spots on the LA Convention Center floor, however, in a sign of the times, it appears as though one non-public domestic car company is reducing expenses where it can.

In comparison to the neighboring bright and showy displays of Kia, VW and Audi, Cerberus backed Chrysler’s brands are practically in the dark (see Jeep on the left vs. Audi on the right in pic below).  Despite opting for the basic-lighting package and no LED displays, at least Chrysler is still committed to presenting its line-up.  Not sure if it was ever in the works, but notably absent is heavily funded Tesla.

Last week TechCrunch announced the rumored sale of European price comparison shopping site Kelkoo for less than 100 million euros to investment group Jamplant Ltd.  The sale was notable given Yahoo unloaded the site for 375 million euros less than what it paid for it in 2004.  But who exactly is Jamplant?

Most media bytes on the transaction describe Jamplant as a private equity firm.  However this suggests some transaction history and possibly other portfolio companies.  The only available info on Jamplant is that the Group consists of several angel investors interested in the price comparison shopping space (talk about narrow), so who know’s what the full story is. Either way, have to credit Jamplant for executing a deal in these turbulent times.  Just wonder if their name will emerge attached to another.

Taking a cue from Forbes 2008 list of America’s largest private companies, see below a list of America’s largest private companies backed by private equity.

No shock most of the companies below were acquired between 2005 and 2007.   Despite the size of many of the transactions, it’s interesting less than half (11/25) represent club deals.

Bloomberg is reporting that Cerberus Capital would be willing to forgo any profits from a future sale of troubled portfolio company Chrysler should the federal government pull the trigger and bailout the auto industry.

Given Chrysler’s private-owner status, CEO Bob Nardelli is hoping the offer elminates questions of unfair gains for Cerberus should government assistance give the company time to turn things around.

If a bailout does go through, this will mark a full circle for Chrysler, which would enjoy its second bailout in the last thirty years.  This time around however, it will need to rebound under private equity ownership which will be a true test for Nardelli.

Even if Robert is able to perform a successful turnaround, no doubt he won’t be looking at the upper end of his orginal compensation package.  The new best-case scenario for Cerberus is a free lesson in the US auto business.