Lindsay Goldberg’s foray into the hedge fund business recently received some in depth treatment with a detailed article in Bloomberg Markets magazine, outlining the firm’s 2007 $100 million dollar working capital investment to jumpstart Phil Duff’s newest hedge fund group Duff Capital Advisors.

The article talks more about how quickly the $100 million disappeared than the investment group that financed it. However, the spread does give some attention to Lindsay Goldberg’s frustrations, finally resulting in Duff’s dismissal.  Today, Duff Capital Advisors is now known as Investment Risk Management and despite just being a zombie shell of itself, the business is still listed as a current portfolio company.

Lindsay Goldberg is well known for it’s patience, stating it can hold an investment for up to twenty years, but it’ll be interesting to see when it finally writes this one off.

CVC Partners can thank weak credit markets for being the last firm standing with enough interest to bid on Anheuser-Busch InBev’s Central and Eastern European businesses.  TPG and KKR had also planned bids but are “blaming” weak credit conditions for bowing out of the process.  Given KKR’s very recent successful close of InBev’s Korean assets, you’d think they’d have the process down.  In that deal, KKR put down 50% (later split with Affinity Equity Partners), which is also what CVC is rumored to be plunking down for InBev’s latest divestiture.  Either way, given the similarty, perhaps we’ll see a familiar name emerge alongside CVC if a sale actually comes through.

Apax Partners’ recently announced take private of BankRate is an encouraging sign for PE m&a.  Mega-sized firms have been pretty quiet of late despite sitting on billions, and have spent more time marking down old investments than making new ones.  Apax’s 20 odd-member media group hasn’t done a deal in over a year and you can tell they’re serious/excited about BankRate.  Should Apax walk away from their offer, they’ve agreed to pay the full purchase price anyway of $570,800,000.

Apax’s offer for BankRate is all cash.  Given the current state of m&a, you’d think this is just a reflection of continued tight credit markets, however prior transactions in boom years proves otherwise.   Apax’s $1.6 billion take private of Tommy Hilfiger in 2006 and its $7.5 billion acquisition of Thomson Learning (with OMERS Capital) in 2007 were also all cash.

After two years of trying to do the impossible in first turning around and then saving Chrysler for Cerberus, ex-CEO Bob Nardelli has apparently returned to the investment firm that recruited him in 2007.  Nardelli’s new role will be heading up Cerberus’ unit charged with overseeing the operations of the investment firm’s portfolio holdings, appropriately named Cerberus Operating and Advisory Company LLC or COAC.  Nardelli will manage other operating pros responsible for monitoring and assisting Cerberus’ current investments, as well as sourcing and conducting due diligence on new opportunities.  Cerberus hasn’t shown much of an appetite lately for making new acquisitions, but there must be a few companies amongst the private equity firm’s 30 odd portfolio roster that can benefit from Nardelli’s brief education in the auto industry.

It’s been reported recently that buyout vet Tom Hicks’ sports empire is crumbling with rumors that his Texas Rangers had to borrow from Major League Baseball just to meet payroll.  This is on top of news several months ago that Hicks Sports Group (HSG), the parent vehicle that owns the Rangers, as well as the NHL’s Dallas Stars amongst other assets had defaulted on $500+ million worth of loans, including a chunk of money lent from Mr. Hicks himself.

Hicks has suggested HSG is just another victim of the global credit crunch (i.e. inability to borrow to the hilt) and economic turmoil, but the bigger problem seems to be poor management, somehow thinking servicing $500 million worth of loans was sustainable.  While sports teams can be great investments, generally inching up over time, they’ve never proven to be tremendous cash-flow generators (even in good times) which makes me wonder how HSG was ever able to convince the 40th lender that $500 million was perfectly sustainable with plenty of margin (a couple autographed bobbleheads perhaps).  Have to give credit to HSG for sustaining at least 1 year into the slowdown.

It’ll be interesting to see where Hicks and HSG goes from here.

Big press release today regarding strong interest in General Motors’ Saturn unit by “investor group” Telesto Ventures, a consortium of sorts which includes “private equity firm” Black Oak Partners. What’s not being mentioned however, are any specific details on the two private equity groups. The web generally provides a treasure trove of info, but this is the first time Black Oak or Telesto seems to be mentioned anywhere. It’ll be interesting to see if more details emerge on whose behind the names.

In a bidding frenzy today, retail toy giant Toys R’Us helped to ensure its future in the online toy world by ponying up $5.1 million for domain name toys.com.  Toys R’Us, purchased for $6.6 billion in 2005 by a KKR led consortium (in another auction), outbid domain holding company National A-1 to come out on top.

While the retailer’s own domain of toysrus.com already ranks well for search query toys, (comes up #2 in google), passing up an opportunity to own the best domain for the industry could prove a costly mistake should toys.com emerge as a new online contender one day.  Who knows what the retailer’s strategy will be with the new asset, but even sales generated from redirecting type-in traffic ought to quickly pay off the purchase.

Stanford Financial, the latest investment firm with a founder grabbing headlines for all the wrong reasons, appears to have plowed $8 billion worth of high-yield bank CD proceeds into illiquid real estate and private equity investments.

The problem isn’t so much with the actual investments but rather that investors bought the high-yield certificates thinking their assets were a little more liquid and secure than what is typical for alternative assets.  As more details emerge, it’ll be interesting to see what private equity deals/funds CD holders actually own.  Hopefully, the $8 billion doesn’t turn out to be a complete wash.  Unlike Madoff and Co., at least Stanford invested in something.

VC backed Cash4Gold (real name Albar Metals), the upstart mail-order gold buyer shown quite often on late night commercials recently upped the ante with a SuperBowl Ad featuring financially troubled celebrities Ed McMahon and MC Hammer.

However, despite all the publicity, numerous complaints on the company’s business practices are beginning to surface.   VentureBeat recently outlined a post on Consumerist describing the company’s business practices from an ex-employee. Let’s just say the comments are pretty disturbing. This follows another account where a blogger whose unflattering internet post of a Cash4Gold exchange was offered several thousand dollars to alter his post so his story didn’t rank so high when Googling “Cash4Gold”, (comes up #2).

Dan Primack at Private Equity Hub noted a month ago that venture firms Highland Capital Partners (tagline Building Great Companies Together) and General Catalyst dumped $40 million into the company, although neither firm has publicly acknowledged the investment. At MIT’s December Venture Capital Conference Dan noted David Fialkow of General Catalyst stating;

“Me and [Highland’s Paul Maeder] here invested in a company we haven’t talked about yet, where these two entrepreneurs are making $1 million a week. They’re not doing anything technical, they’re just innovative… The reality is that great entrepreneurs figure out how to make money.”

I’m not sure why a company making $1 million a week with a simple business model would need a $40 million cash infusion, (other than the founders perhaps seeing the end and wanting to partially cashout, oh, and that Superbowl ad), but it does beg the question if both VC outfits were perfectly fine profiting from Cash4Gold’s innovative business model. I assume their due diligence process uncovered at least one complaint.

Who know’s what the future holds for Cash4Gold, but unless the company can turnaround its image by turning around its business practices, I don’t see a happy ending.

What’s interesting though is had Cash4Gold not appeared so seemingly greedy (allegedly offering 1/3 the value of your gold), this company probably had a long-term shot.

When it comes down to it, Cash4Gold’s business model is no different than hugely successful change converter Coinstar. The only difference is the fee. Coinstar’s fee is 8.9% and is easily found on the company’s website. Cash4Gold’s fee may be unavailable on its website, but is increasingly easy to find on other’s.

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.