PrivateRaise Announces Record PIPE Investment; Releases 2008 League Tables
NEW YORK –- Private placements of equity securities by publicly traded companies decreased dramatically in the fourth quarter, even as total investment continued to shatter previous records, buoyed by big deals involving large-cap financial companies, according to data tracked by PrivateRaise, a service of DealFlow Media (www.dealflowmedia.com/privateraise).
For the full year, public companies raised more than $123 billion through private investments in public equities (PIPEs) in 2008, an 86% increase over 2007's record $66 billion. Yet the total number of closed PIPE deals fell 30% to 1,138 – a level of transaction activity not seen since 2003. Investment volume in PIPEs was boosted by a surge in multi-billion dollar recapitalization activity by large-cap financial firms at the center of last year's credit crisis. Seventy companies with market caps in excess of $1 billion raised almost $104 billion via PIPEs in 2008, representing 84% of the total capital raised last year.
Public companies closed 192 PIPEs, raising $40.87 billion in the fourth quarter, a 39% decrease in deals but a 130% increase in capital investment over the previous quarter. Compared to the year-ago quarter, deal activity fell 56% while total investment rose 31%. PIPE issuance by financial institutions dominated the quarter's issuance activity, representing 69% of capital raised and 13% of closed deals.
The bear market in small- and micro-cap stocks depressed fourth quarter activity in the PIPE market's traditional core constituency of under-$250 million market cap companies even further than in the third quarter. While small- and micro-cap issuers comprised 81% of PIPE deals completed in the fourth quarter, they raised only 5% of the capital. For the full year, small- and micro-cap issuers comprised 83% of PIPE transactions, but raised just 9% of the total capital invested through PIPEs.
PIPE investors clearly favored convertible and preferred securities over common stock in the fourth quarter. Issues structured as debt with warrants, convertible debt, convertible preferred and preferred stock represented 44% of deals and 88% of capital raised in the fourth quarter, while common stock deals represented 48% of deals but only 10% of capital raised. One year ago, common stock deals represented 55% of all deals and 42% of all capital raised in the fourth quarter.
"Investors focused on return of principal over return on principal in the fourth quarter," said J.B. Summitt, Director of Research at PrivateRaise. "The impact of the chaos in the equity and credit markets was evident in their choice of deal structures which offered some protection from the volatility in common stock prices. Indeed, where such protection was not available, investors were not reticent to cancel deals," Summitt noted. "Along with the sharp overall decrease in the number of deals getting done toward the end of 2008, we saw a marked increase in the number of amended and outright cancelled deals as compared to the same period in 2007." There were eight cancelled and 13 amended deals in the fourth quarter of 2008, versus two and six, respectively, in Q4 2007.
"PIPE Investment dollars are likely to fall, and transaction activity to rise, as the market moves through this period of dislocation and regresses to its historical mean activity range," said Brett Goetschius, Editor and Publisher of The PIPEs Report, a twice-monthly newsletter on the PIPE market produced by DealFlow Media. "I would not be surprised to see a surge in pent-up deal activity in the first and second quarters by traditional micro- and small-cap issuers eager to replenish their capital reserves at the first opportunity afforded them by any sustained uptick in their share prices," said Goetschius.
"But we may have hit a high-water mark in terms of investment volume for the near future, as the government's TARP infusions and an easing of the credit crisis stabilizes the large financial institutions that relied on the PIPE market in 2008 to quickly raise vast amounts of emergency capital," he added. "Nonetheless, 2008 will likely be remembered as the year when the PIPE market 'grew up' and proved its ability to allocate capital quickly and efficiently to public companies of all sizes, when other sectors of the capital markets seized up and failed."
2008 PRIVATERAISE LEAGUE TABLES
2008 Top 25 PIPE Issuers |
||||
(ranked by $ raised) |
Raised $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Barclays PLC |
$20,047.28 |
$4,009.46 |
5 |
2 |
Citigroup Inc. |
$12,500.00 |
$12,500.00 |
1 |
3 |
UBS AG |
$12,227.24 |
$12,227.24 |
1 |
4 |
Morgan Stanley |
$7,839.21 |
$7,839.21 |
1 |
5 |
Washington Mutual, Inc. |
$7,199.95 |
$1,799.99 |
4 |
6 |
National City Corporation |
$7,000.00 |
$2,333.33 |
3 |
7 |
Merrill Lynch & Co., Inc. |
$6,600.00 |
$6,600.00 |
1 |
8 |
Goldman Sachs Group, Inc. |
$5,000.00 |
$5,000.00 |
1 |
9 |
Dow Chemical Company |
$4,000.00 |
$4,000.00 |
1 |
10 |
Deutsche Bank AG |
$3,164.48 |
$3,164.48 |
1 |
11 |
General Electric Company |
$3,000.00 |
$3,000.00 |
1 |
12 |
Hartford Financial Services Group, Inc. |
$2,500.00 |
$1,250.00 |
2 |
13 |
Canadian Imperial Bank of Commerce |
$1,471.89 |
$1,471.89 |
1 |
14 |
Legg Mason, Inc. |
$1,250.00 |
$1,250.00 |
1 |
15 |
Boardwalk Pipeline Partners, LP |
$1,176.00 |
$588.00 |
2 |
16 |
Thornburg Mortgage, Inc. |
$1,150.00 |
$1,150.00 |
1 |
17 |
Manulife Financial Corporation |
$909.46 |
$909.46 |
1 |
18 |
General Growth Properties, Inc. |
$821.86 |
$821.86 |
1 |
19 |
MoneyGram International, Inc. |
$760.00 |
$760.00 |
1 |
20 |
Delta Petroleum Corporation |
$684.00 |
$684.00 |
1 |
21 |
St. Joe Company |
$600.08 |
$600.08 |
1 |
22 |
MBIA Inc. |
$500.00 |
$500.00 |
1 |
23 |
Enbridge Energy Partners, L.P. |
$499.85 |
$499.85 |
1 |
24 |
Las Vegas Sands Corp. |
$475.00 |
$475.00 |
1 |
25 |
Standard Pacific Corp. |
$450.83 |
$450.83 |
1 |
2008 Top 25 PIPE Placement Agents |
||||
(ranked by # of deals placed) |
Placed $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Rodman & Renshaw, LLC |
$520.03 |
$13.00 |
40 |
2 |
Canaccord Capital Corp. |
$867.50 |
$45.66 |
19 |
3 |
Lazard |
$1,567.52 |
$97.97 |
16 |
4 |
Roth Capital Partners, LLC |
$237.91 |
$15.86 |
15 |
5 |
Merriman Curhan Ford & Co. |
$228.92 |
$17.61 |
13 |
5 |
Midtown Partners & Co., LLC |
$40.09 |
$3.08 |
13 |
7 |
Deutsche Bank AG |
$5,649.59 |
$470.80 |
12 |
8 |
Goldman, Sachs & Co. |
$16,699.95 |
$1,855.55 |
9 |
9 |
Lehman Brothers Inc. |
$7,390.74 |
$923.84 |
8 |
9 |
RBC Capital Markets |
$661.10 |
$82.64 |
8 |
11 |
Credit Suisse Group |
$13,060.75 |
$1,865.82 |
7 |
11 |
Dundee Securities Corporation |
$97.11 |
$13.87 |
7 |
13 |
Oppenheimer & Co. Inc. |
$195.55 |
$32.59 |
6 |
13 |
Emerging Growth Equities, Ltd. |
$32.52 |
$5.42 |
6 |
13 |
Maxim Group, LLC |
$30.84 |
$5.14 |
6 |
13 |
Empire Asset Management Group, LLC |
$24.80 |
$4.13 |
6 |
13 |
Palladium Capital Advisors, LLC |
$16.63 |
$2.77 |
6 |
18 |
UBS Securities LLC |
$3,151.69 |
$630.34 |
5 |
18 |
CIBC World Markets Inc. |
$1,848.49 |
$369.70 |
5 |
18 |
Leerink Swann & Company |
$135.23 |
$27.05 |
5 |
18 |
Piper Jaffray & Co. |
$111.49 |
$22.30 |
5 |
18 |
Thomas Weisel Partners LLC |
$55.31 |
$11.06 |
5 |
18 |
Dawson James Securities |
$36.25 |
$7.25 |
5 |
18 |
GMP Securities Ltd. |
$34.30 |
$6.86 |
5 |
25 |
J.P. Morgan Chase & Co. |
$13,484.08 |
$3,371.02 |
4 |
2008 Top 25 PIPE Placement Agents |
||||
(ranked by $ placed) |
Placed $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Goldman, Sachs & Co. |
$16,699.95 |
$1,855.55 |
9 |
2 |
J.P. Morgan Chase & Co. |
$13,484.08 |
$3,371.02 |
4 |
3 |
Credit Suisse Group |
$13,060.75 |
$2,176.79 |
6 |
4 |
Lehman Brothers Inc. |
$7,390.74 |
$923.84 |
8 |
5 |
Deutsche Bank AG |
$5,649.59 |
$470.80 |
12 |
6 |
UBS Securities LLC |
$3,151.69 |
$630.34 |
5 |
7 |
CIBC World Markets Inc. |
$1,848.49 |
$369.70 |
5 |
8 |
Lazard |
$1,567.52 |
$97.97 |
16 |
9 |
Friedman, Billings, Ramsey & Co., Inc. |
$1,150.00 |
$1,150.00 |
1 |
10 |
Canaccord Capital Corp. |
$867.50 |
$45.66 |
19 |
11 |
RBC Capital Markets |
$661.10 |
$82.64 |
8 |
12 |
Jefferies & Company Inc. |
$548.72 |
$137.18 |
4 |
13 |
Rodman & Renshaw, LLC |
$520.03 |
$13.00 |
40 |
14 |
Merrill Lynch & Co. |
$484.98 |
$121.25 |
4 |
15 |
BMO Financial Group |
$450.36 |
$112.59 |
4 |
16 |
Banc of America Securities LLC |
$418.09 |
$104.52 |
4 |
17 |
Blackmont Capital Inc. |
$363.83 |
$121.28 |
3 |
18 |
Genuity Capital Markets |
$361.10 |
$120.37 |
3 |
19 |
TD Bank Financial Group |
$352.59 |
$88.15 |
4 |
20 |
National Bank Financial Inc. |
$345.00 |
$86.25 |
4 |
21 |
Keefe Bruyette & Woods, Inc. |
$336.62 |
$168.31 |
2 |
22 |
Scotia Capital Inc. |
$309.80 |
$154.90 |
2 |
23 |
Sandler O'Neill & Partners, L. P. |
$305.79 |
$101.93 |
3 |
24 |
Macquarie Bank Limited |
$289.80 |
$289.80 |
1 |
25 |
Roth Capital Partners, LLC |
$237.91 |
$15.86 |
15 |
2008 Top 25 PIPE Investors |
||||
(ranked by # of deals invested) |
Invested $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Downsview Capital, Inc. |
$34.55 |
$1.15 |
30 |
2 |
Enable Capital Management, LLC |
$68.52 * |
$2.54 * |
29 |
3 |
UBS AG |
$165.34 * |
$7.87 * |
22 |
4 |
Hudson Bay Capital Management LP |
$60.60 * |
$3.03 * |
21 |
5 |
Iroquois Capital L.P. |
$29.62 |
$1.48 |
20 |
6 |
Highbridge Capital Management, LLC |
$280.60 * |
$17.54 * |
18 |
6 |
Vicis Capital, LLC |
$60.25 |
$3.35 |
18 |
8 |
Midsummer Capital, LLC |
$26.04 * |
$1.63 * |
17 |
9 |
Wellington Management Company, LLP |
$653.88 * |
$43.59 * |
16 |
9 |
Whalehaven Fund Ltd. |
$5.12 * |
$0.39 * |
16 |
11 |
Ramius Capital Group, LLC |
$156.23 * |
$12.02 * |
15 |
11 |
Chestnut Ridge Capital |
$3.92 |
$0.26 |
15 |
13 |
Whitebox Advisors, Inc. |
$100.14 |
$7.15 |
14 |
13 |
Yorkville Advisors, LLC |
$63.87 |
$4.56 |
14 |
13 |
Atoll Asset Management, LLC |
$15.18 * |
$1.17 * |
14 |
16 |
LH Financial Services Corp. |
$5.92 |
$0.46 |
13 |
17 |
T. Rowe Price Group, Inc. |
$547.34 * |
$49.76 * |
12 |
17 |
Guerrilla Capital Management |
$17.44 |
$1.45 |
12 |
17 |
Crestview Capital Funds |
$8.34 |
$0.69 |
12 |
20 |
Lehman Brothers Holdings Inc. |
$83.32 |
$7.57 |
11 |
20 |
Vision Capital Advisors, LLC |
$56.36 |
$5.12 |
11 |
22 |
Fidelity Management & Research Company |
$1,437.07 * |
$159.67 * |
10 |
22 |
Quercus Trust |
$98.61 |
$9.86 |
10 |
22 |
Ardsley Partners |
$33.71 |
$3.37 |
10 |
22 |
Straus Capital Management, L.L.C. |
$6.72 |
$0.67 |
10 |
2008 Top 25 PIPE Investors |
||||
(ranked by $ invested) |
Invested $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Government of Singapore Investment Company Pte, Ltd. |
$17,226.12 * |
$8,613.06 * |
3 |
2 |
Berkshire Hathaway Inc. |
$11,300.00 |
$2,825.00 |
4 |
3 |
Mitsubishi UFJ Financial Group, Inc. |
$7,839.21 |
$7,839.21 |
1 |
4 |
Qatar Investment Authority |
$6,159.42 |
$2,053.14 |
3 |
5 |
Kuwait Investment Authority |
$6,009.01 * |
$1,201.80 * |
6 |
6 |
TPG |
$3,385.43 |
$564.24 |
6 |
7 |
Allianz SE |
$2,500.00 |
$1,250.00 |
2 |
8 |
Korean Investment Corporation |
$2,000.00 |
$2,000.00 |
1 |
9 |
Fidelity Management & Research Company |
$1,437.07 * |
$159.67 * |
10 |
10 |
Challenger Universal Limited |
$1,366.13 |
$683.07 |
2 |
11 |
Capital Research and Management Company |
$1,344.77 * |
$268.95 * |
7 |
12 |
Mizuho Financial Group |
$1,320.00 |
$660.00 |
2 |
13 |
Matlin Patterson Global Advisers LLC |
$1,178.54 |
$294.63 |
4 |
14 |
Sumitomo Group |
$985.46 |
$985.46 |
1 |
15 |
Kohlberg Kravis Roberts & Co. |
$937.50 * |
$937.50 * |
2 |
16 |
Corsair Capital Management Inc. |
$785.28 |
$392.64 |
2 |
17 |
New Jersey Division of Investment |
$700.00 |
$350.00 |
2 |
17 |
Toscafund Asset Management LLP |
$700.00 * |
$700.00 * |
2 |
19 |
Wellington Management Company, LLP |
$653.88 * |
$43.59 * |
16 |
20 |
Warburg Pincus LLC |
$606.46 |
$202.15 |
3 |
21 |
Fairfax Financial Holdings Limited |
$550.06 |
$183.35 |
3 |
22 |
T. Rowe Price Group, Inc. |
$547.34 * |
$49.76 * |
12 |
23 |
Och-Ziff Capital Management Group, LLC |
$531.78 * |
$75.97 * |
8 |
24 |
Canyon Capital Advisors, LLC |
$511.23 |
$127.81 |
4 |
25 |
Goldman Sachs Group, Inc. |
$505.43 |
$84.24 |
6 |
2008 Top 25 PIPE Investor Law Firms |
||||
(ranked by # of deals advised) |
Advised $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Schulte Roth & Zabel LLP |
$3,858.25 |
$66.52 |
58 |
2 |
Feldman Weinstein & Smith LLP |
$337.19 |
$7.33 |
46 |
3 |
Greenberg Traurig, LLP |
$370.95 |
$23.18 |
16 |
4 |
Quarles & Brady Streich Lang LLP |
$33.91 |
$3.08 |
11 |
5 |
Latham & Watkins LLP |
$1,010.67 |
$112.30 |
9 |
6 |
Sullivan & Cromwell LLP |
$10,796.71 |
$1,349.59 |
8 |
6 |
Simpson, Thacher & Bartlett |
$2,760.11 |
$345.01 |
8 |
6 |
Greenberg Glusker Fields Claman & Machtinger, LLP |
$196.25 |
$24.53 |
8 |
6 |
Loeb & Loeb LLP |
$47.35 |
$5.92 |
8 |
10 |
Seward & Kissel LLP |
$7,380.66 |
$1,054.38 |
7 |
10 |
O'Melveny & Myers LLP |
$348.00 |
$49.71 |
7 |
10 |
Proskauer Rose LLP |
$298.05 |
$42.58 |
7 |
10 |
Lowenstein Sandler PC |
$63.42 |
$9.06 |
7 |
10 |
Grushko & Mittman, P.C. |
$24.31 |
$3.47 |
7 |
15 |
Winston & Strawn |
$138.30 |
$23.05 |
6 |
16 |
Katten Muchin Rosenman LLP |
$405.00 |
$81.00 |
5 |
16 |
Skadden, Arps, Slate, Meagher & Flom LLP |
$316.23 |
$63.25 |
5 |
16 |
Cooley Godward Kronish LLP |
$82.34 |
$16.47 |
5 |
16 |
James G. Dodrill II, P.A. |
$9.70 |
$1.94 |
5 |
20 |
Munger, Tolles & Olson LLP |
$12,400.00 |
$3,100.00 |
4 |
20 |
Shearman & Sterling LLP |
$965.73 |
$241.43 |
4 |
20 |
Weil, Gotshal & Manges LLP |
$818.68 |
$204.67 |
4 |
20 |
Goodwin Procter LLP |
$123.99 |
$31.00 |
4 |
20 |
McDermott Will & Emery |
$36.01 |
$9.00 |
4 |
20 |
Anslow & Jaclin, LLP |
$29.62 |
$7.41 |
4 |
2008 Top 25 PIPE Issuer Law Firms |
||||
(ranked by # of deals advised) |
Advised $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Sichenzia Ross Friedman Ference LLP |
$152.31 |
$5.08 |
30 |
2 |
Cooley Godward Kronish LLP |
$461.94 |
$24.31 |
19 |
3 |
Greenberg Traurig, LLP |
$140.64 |
$8.27 |
17 |
4 |
Loeb & Loeb LLP |
$308.59 |
$22.04 |
14 |
4 |
Richardson & Patel, LLP |
$68.97 |
$4.93 |
14 |
6 |
DLA Piper |
$164.89 |
$12.68 |
13 |
7 |
K & L Gates |
$130.23 |
$10.85 |
12 |
7 |
Clark Wilson LLP |
$42.41 |
$3.53 |
12 |
9 |
Weil, Gotshal & Manges LLP |
$3,334.97 |
$303.18 |
11 |
9 |
Morgan, Lewis & Bockius LLP |
$74.47 |
$6.77 |
11 |
11 |
Sullivan & Cromwell LLP |
$20,200.78 |
$2,020.08 |
10 |
11 |
Skadden, Arps, Slate, Meagher & Flom LLP |
$993.31 |
$99.33 |
10 |
11 |
WilmerHale |
$431.62 |
$43.16 |
10 |
11 |
Latham & Watkins LLP |
$230.62 |
$23.06 |
10 |
11 |
Paul, Hastings, Janofsky & Walker LLP |
$171.93 |
$17.19 |
10 |
11 |
Hodgson Russ LLP |
$91.04 |
$9.10 |
10 |
11 |
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C |
$81.16 |
$8.12 |
10 |
18 |
Shearman & Sterling LLP |
$5,869.90 |
$652.21 |
9 |
18 |
Lowenstein Sandler PC |
$191.53 |
$21.28 |
9 |
18 |
Morrison & Foerster LLP |
$98.68 |
$10.96 |
9 |
21 |
Vinson & Elkins L.L.P. |
$2,129.90 |
$266.24 |
8 |
21 |
Heller Ehrman LLP |
$1,347.69 |
$168.46 |
8 |
21 |
Goodwin Procter LLP |
$235.67 |
$29.46 |
8 |
24 |
Jones, Day, Reavis & Pogue |
$7,551.36 |
$1,078.77 |
7 |
24 |
Ropes & Gray LLP |
$134.91 |
$19.27 |
7 |
2008 Top 25 PIPE Placement Agent Law Firms |
||||
(ranked by # of deals advised) |
Advised $ (m) |
Avg. $ (m) |
Deals |
|
1 |
Feldman Weinstein & Smith LLP |
$509.54 |
$13.41 |
38 |
2 |
Proskauer Rose, LLP |
$895.34 |
$59.69 |
15 |
3 |
Lowenstein Sandler, PC |
$783.56 |
$55.97 |
14 |
4 |
Goodwin Procter, LLP |
$737.94 |
$67.09 |
11 |
5 |
Winston & Strawn LLP |
$106.41 |
$13.30 |
8 |
6 |
Morrison & Foerster LLP |
$387.49 |
$64.58 |
6 |
7 |
Littman Krooks, LLP |
$21.04 |
$5.26 |
4 |
7 |
Cassels Brock & Blackwell LLP |
$13.27 |
$3.32 |
4 |
8 |
DLA Piper |
$103.09 |
$34.36 |
3 |
8 |
Pillsbury Winthrop Shaw Pittman LLP |
$70.18 |
$23.39 |
3 |
9 |
Stikeman Elliott LLP |
$1,558.34 |
$779.17 |
2 |
9 |
Sichenzia Ross Friedman Ference LLP |
$40.00 |
$20.00 |
2 |
9 |
Blake, Cassels & Graydon LLP |
$39.56 |
$19.78 |
2 |
9 |
Bush Ross, P.A. |
$3.75 |
$1.88 |
2 |
10 |
Skadden, Arps, Slate, Meagher & Flom LLP |
$1,471.89 |
$1,471.89 |
1 |
10 |
O'Melveny & Myers LLP |
$60.00 |
$60.00 |
1 |
10 |
Hahn & Hessen LLP |
$40.00 |
$40.00 |
1 |
10 |
Sidley Austin LLP |
$34.50 |
$34.50 |
1 |
10 |
Wilmer Cutler Pickering Hale and Dorr LLP |
$30.90 |
$30.90 |
1 |
10 |
Troutman Sanders LLP |
$28.28 |
$28.28 |
1 |
10 |
Davis Polk & Wardwell |
$25.88 |
$25.88 |
1 |
10 |
Edwards Angell Palmer & Dodge LLP |
$25.20 |
$25.20 |
1 |
10 |
Greenberg Traurig |
$19.08 |
$19.08 |
1 |
10 |
Borden Ladner Gervais LLP |
$14.80 |
$14.80 |
1 |
10 |
Arnold & Porter LLP |
$14.80 |
$14.80 |
1 |
(1) All Rankings for 1/1/08 - 12/31/08 (PrivateRaise.com data as of 1/12/09)
(2) PIPE Placement Agent Rankings, for co-agented transactions each Agent is allocated 100% of Issuance Amount
(3) PIPE Investor Rankings, exclude Corporate Entities (e.g., Microsoft)
(4) PIPE Investor Rankings, (*) Excludes transactions where Investment Amount is Unknown
(5) All Rankings exclude Equity Line transactions
(6) All Rankings exclude PIPE transactions executed by Foreign-Based Issuers that trade on the Over-the-Counter market (Pink Sheets)
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DealFlow Media was founded in 2003 with the launch of The PIPEs Report, the premier research publication for those in the equity private placement market. Since its inception, DealFlow Media has distinguished itself as a provider of independent research and analysis of alternative asset markets. The company has grown rapidly and now publishes six alternative investment reports and weekly news wires as well as hosting conferences and webinars throughout the year.
About PrivateRaise
PrivateRaise is the leading source for data and analysis of private investments in public equity (PIPEs), Reverse Mergers, and Special Purpose Acquisition Companies (SPACs). This award-winning service simplifies researching these investment structures and the entities associated with these transactions including investors, placement agents, and law firms. PrivateRaise also offers the only comprehensive database of alternative public offering transactions and a proprietary directory of market participants.
PrivateRaise information services can be accessed at www.dealflowmedia.com/privateraise.
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Phil Kerewich
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E: pkerewich@privateraise.com