Apax Partners

Apax Partners LLP serves as the holding company in behalf of the worldwide Apax partnership, which in turn serves as the lead investment adviser to the latest Apax Funds. The firm is an independent private equity advisory firm with operations worldwide. The firm technically places its investments in five different growth sectors including retail and consumer, media, technology and telecommunications, healthcare, and financial & business services.

The firm hands over capital for a number of important investors such as private pension funds, university endowments, insurance companies, and other financial institutions. It also purchases both minor and major stakes in huge companies that possess a strong and established position in the market and a good potential to expand.

Moreover, the firm also finances first-rate management teams in order to facilitate well-organized and sustainable businesses that possess a commendable track record of progress as a result of investing in research and development, sales, export, as well as employment.

The firm aims to help companies, management teams, and portfolio company employees to release their full potential in order to generate more returns for the vast number of individuals whose investment plans and pension funds are handed over to the firm’s funds.

The Apax Partners firm focuses its investments in large companies across the five specific aforementioned global growth sectors and has done so for the past 25 years. Staffed by local nationals, the firm’s offices were completed within an average of 13 years. The firm’s advantage in terms of finding new and fresh investment opportunities comes from its close relationships with tough decision makers in every country or location they operate in.

Currently employing an average of 300 workers, Apax Partners is among the small groups involved in the private equity industry to have effectively embraced the challenges of today’s issue of globalization.

Warburg Pincus LLC

Actively operating as a private equity and venture capital firm, Warburg Pincus LLC places its investments in all stages of a company’s growth, from the primary founding startups, to early stage financing, to growth equity investments, as well as in developing companies, recapitalizations, restructurings, and the management buyouts of mature businesses.

The Warburg Pincus firm also invests in the changes made within control leveraged buyout transactions, minority private investments made in public companies, divisional spinouts of noncore corporate assets, as well as transactions made in favor of special situations while putting emphasis on the acquisition of undervalued companies.

In general, the firm typically invests in healthcare, financial services, media, telecommunications, energy, consumers and industrials, as well as in real estate sectors. In terms of life sciences and healthcare, the firm aims to invest in schemes that offer valuable services such as medical devices, healthcare services, specialty pharmaceuticals, and biotechnology. On medical devices, the firm shifts more of its attention to specific concerns including interventional cardiology, diabetes, orthopedics, as well as urology or gynecology. As for the investments made in financial services, Warburg Pincus places it investments primarily in private banking, specialty and consumer finance, payment and transaction processing companies, financial technology exchange, insurance companies, asset and wealth management, and in depository institutions.

With all these investments, the firm has become a global leader in the industry. Throughout its track record of more than 40 years, the firm has successfully invested over $29 billion in more than 600 companies in 30 countries all over the globe.

In an effort to create sustainable value, the firm has continuously partnered with superior management teams. As a result, Warburg Pincus has helped many companies formulate strategies, conceptualize, as well as execute creative financing structures, and employ talented and knowledgeable executives and professionals.

Madison Dearborn Partners

The Madison Dearborn Partners is a private equity firm founded in 1992. Based in Chicago, Illinois, the firm offers specialized services that are relevant in the leveraged buyout of either privately held or publicly traded companies, as well as subsidiaries of a larger company, recapitalizations of closely held or family owned companies, acquisition financings, restructuring of balance sheets, and growth capital investments in highly developed companies.

Previously, the founders of the firm completed private equity investments for the First Chicago Bank. The firm’s chairman, John Canning, Jr., also holds a position as a minority owner of the Milwaukee Brewers baseball team.

Headed by a group of prominent visionaries, the Madison Dearborn Partners teamed up with Michael Eisner’s Tormante investment company on 2007 in order to purchase the baseball card maker Topps Company. For two consecutive years, the firm successfully completed a bunch of publicly traded companies including CDW, LA Fitness, Asurion, Nuveen Investments, Univision Communications, VWR International, Sorenson Communications, and the Yankee Candle.

On June 30 of the same year, the Bell Canada Enterprises (or the BCE) announced that the company entered into a definitive agreement that allowed Bell Canada Enterprises to be purchased with adherence to a certain plan of arrangement made by an investor group headed by the Ontario Teachers’ Pension Plan’s private investment arm, the Teachers Private Capital, as well as the Providence Equity Partners Inc., and the Madison Dearborn Partners. The all-cash transaction was valued at a total of C$51.7 billion, or US$48.5 billion, with the inclusion of C$16.9 billion worth of preferred equity, debt, as well as minority interests. The agreement was then approved on September of 2007 during a special meeting attended by a group of shareholders. The agreement was decided upon by more than 97% of the total votes casted by the holders of preferred and common shares.

Jumpstarting Your Investment in Stocks

While in a time or two, other investment vehicles have outperformed stocks, it has been proven to be the most reliable. What type of stocks is right for you? There are several options: individual stocks, index funds, mutual funds, index funds, ETFs, domestic, and foreign. Before choosing, here are a few pointers to serve as guide for the inexperienced and experienced investor alike.

Personality type
Different personality types are well-suited for particular types of stocks. Generally, there are three kinds of investors – risk taker, risk averse, and middle. If you are not inclined to risk and want to stay safe and sure, go for mutual funds or index funds. Because these are well-diversified and contain different stocks, going for them reduces risk and does not entail individual stock research.

Time factor
Deciding to invest in stocks, funds, or both depends on how much time you are willing to dedicate. Individual stocks are the most time-consuming because investing in them requires research, judgments on earnings, management, and future prospects. Mutual and index funds are less time-consuming since the fund manager picks stocks for you. Index funds are even simpler since they move according to type of market or company they track.

Diversification
Do not invest in only one type of asset. It is potentially disastrous for your portfolio. Spread your assets across different sectors such as real estate, commodities, insurance, etc. Consider diversification across asset classes as well.

Recommended portfolio
For beginners: a portfolio for the inexperienced would consist of a couple of index funds. One index fund to track the broad market and one to give foreign exposure will be a boost.
For individual stocks: a portfolio composed of 12-20 carefully selected individual stocks will give you diversification and is just enough for you to follow regularly. For those who do not have or do not want to invest time on following many stocks, a portfolio mix of individual stocks and index funds is favorable.

The 10 Commandments of Sound Investing

Like the Ten Commandment in the Bible, the rules presented in this article collectively act as a guide toward sound and responsible investing.

1. Thou shalt set clear goals. Invest only if you have clear objectives in sight. Without this, your effort and money may soon be put to waste.
2. Thou shalt put thy financial house in order. If you are up to the neck in credit card debt or bills, investing is a bad idea. Take care of these concerns first before investing.
3. Thou shalt question authority. Investment requires the initiative to ask and answer the questions. Do not rely on what the higher-ups – CEOs, CFOS, CFAs – say will be good for investment. Educate yourself and research on concrete financials.
4. Thou shalt not follow sheep. Herd mentality has proven to be injurious in Wall Street. Accepting information without being critical consequently leads to this behavior. Check things and determine the real value of stocks.
5. Thou shalt be humble. Overconfidence leads to overtrading that in turn leads to unnecessary risk-taking and losses.
6. Thou shalt be patient. Patience is a virtue in investing because the trait pays for itself. The best behavior in a crisis is to take your time.
7. Thou shalt show moderation. When you invest in too many stocks at the same time, you may find yourself pulling out prematurely, so practice moderation.
8. Thou shalt not ogle thy investment. Over-monitoring your investment is a no-no. The more you excessively oversee, the more you want to blend investments.
9. Thou shalt not court or spurn risk. There is a unique threshold of risk for every investor by creed and age.
10. Thou shalt not make heroes of mere men. Idolizing too much of finance greats and mimicking their strategy is a bad idea. You can learn from them but need to develop an independent mind.

Kohlberg Kravis Roberts & Co

The New York City-based private equity firm Kohlberg Kravis Roberts & Co began its operations when Jerome Kohlberg, Jr. bonded with cousins Henry Kravis and George Roberts in 1976. Today, the firm has expanded to include a team of around 400 employees and 140 investments professionals.

More commonly referred to as KKR, the firm manages and sponsors a number of investment funds. With its primary focus fixed on leveraged buyouts of full-grown business establishments and growth capital investments, the firm entered into PIPE (Private Investment in Public Equity) investments in a number of public companies. Moreover, Kohlberg Kravis and Roberts & Co successfully created a total of nine dedicated investment groups by specializing in private equity investments and focusing on specific sectors in the industry. The firm effectively developed certain specializations in a couple of industries specifically on consumer products, chemicals, energy & natural resources, health care, financial services, industrial, retail, media and communications, as well as technology.

Since the firm’s inception, Kohlberg Kravis Roberts & Co has completed a total of more than $400 billion worth of private equity transactions that includes a number of landmark dealings such as the leveraged buyout of RJR Nabisco in 1989. That particular transaction goes down as the largest buyout in the firm’s history, in addition to the 2007 buyout of TXU. To date, the Kohlberg Kravis Roberts & Co equity firm has completed investments in more than 160 companies ever since 1977.

Aside from its headquarters in the Solow Building at 9 West 57th Street in New York, Kohlberg Kravis Roberts & Co has 11 additional offices in the United States, Europe and Asia including Menlo Park, San Francisco, Houston, London, Washington DC, Paris, Mumbai, Hong Kong, Beijing, Sydney Tokyo, and Dubai.

Henry Kravis and George Roberts continue to run KKR.

Got $1,000? Get Ready To Invest.

This article will aid inexperienced investors in getting started with just $1,000 saved toward maximizing their returns while minimizing costs. When you are still new to the business, it is important choose wisely on what to invest and how to go about investing.

Account minimums: All financial institutions have requirements for minimum deposit. If you have only $1,000 to start with, understand that some firms will deny you in opening an account.

Stocks: Choosing a compatible stockbroker is important, and they usually come in two types: discount and full-service. Someone with a $1,000 investment amount has the option of the discount broker. Though they have low fees, you do not get as much service or investment advice. Other options include direct stock purchase plans (DSPPs), which have over $100 to $500 minimum investment restrictions and online brokers that have low or no minimum deposit restrictions but do impose higher fees for specific types of trades.

Mutual Funds and Bonds: If you are interested in mutual funds, you can purchase through brokerage firms or through the local bank. If you fancy government bonds, which feature a minimum purchase ranging from $100 to $1000, you can go to TreasuryDirect.

Investment Costs: Know the costs attached to an investment. Every investment you purchase will cost you money in commissions. When you trade frequently, you will incur trading fees that range from $10 to $30. Mutual funds have the management expense ratio (MER) charged by the management team annually. For the newbie investor, mutual funds are advantageous because of dollar cost averaging (DCA) where fees remain the same regardless of the amount of investment.

Diversification: Another important thing to consider is diversification. With a $1,000 deposit, getting a well-diversified stock portfolio is difficult and risky. Go for mutual funds instead since they tend to include a large number of stocks within the fund.

The Real Deal About Valuing Real Estate

Dr. Steve Sjuggerud of Investment University gives two valuable real-world rules on selling or buying real estate.

The first rule: do not pay too much for good old earth. If you are after real estate stock, do not pay more than a 10% premium to the properties’ market value. If you want to buy a house, determine the comparable home values in the area and think carefully before you consider paying a 10% premium. The best advice in buying real estate is getting a 20% discount. It is hard, but not impossible to do, particularly if you are willing to groom up properties after buying them.

The second rule: do not pay too much for real estate “business.” Consider “price-to-earnings” (P/E) to determine your property’s true “intrinsic” value. Earnings take the form of rent. A good yardstick for real estate is the “1% above Treasury bond” rule. The nationwide net rent averages 6.15% (earnings-to-price ratio). In order to get P/E, inversing this value would mean that the “fair” value of your property should have a P/E ratio of 16. Forbes suggests that in order to get P/E for your property, one should get comparable rents data from relocation departments of large real estate firms. If you compute a low P/E, this means you got a sweet deal out of your property or you can expect high rental collections from it. If you compute twice as high as 16, then you should consider selling.

This is not however, a fixed guide. Real estate is liquid, unlike stocks, so there is a lot of guessing involved. Applying these rules does not guarantee success for you on a regular basis but it can improve your chances significantly by applying stock market rules to real estate. Just like the 1-2-3 model used in stocks, one always bears in mind that making money in the long run is impossible when the P/E is above 17.

Ten Ways of Evaluating Your Broker

There are 10 things to consider in choosing a broker or in evaluating whether your broker measures up.

1. Trading commissions: Cheaper may not be better. The price per trade may be indicative of the level of customer service executed. If you go cheaper, you may find yourself at the end of the line with your questions unanswered, whereas paying more would most likely mean excellent service.
2. Other fees: It is important to know that brokerages charge other fees for services, such as for transferring assets into the account, wire transfer, IRA custodian, etc. Know what you need first so you won’t have to pay for unnecessary services.
3. Minimum initial deposit: Beginning investors should consider the initial investment amount they’re most comfortable with. Since some brokers have account minimums, choose one that suits your budget.
4. Customer service: Research on the services offered before signing up. Consider website performance and interface, speedy service, and a good phone service.
5. Traditional banking services: Look for a brokerage account that can adjust to your banking needs.
6. Research: Decide whether or not you have to pay for research (analyst reports, financial data, and real-time quotes) when you can do it yourself online.
7. Mutual funds: Check whether you have to pay for no-load mutual funds since some brokers charge fees. If you have a particular mutual fund family in mind, ensure that your broker offers that.
8. Investment product selection: Check so that the broker you choose offers investment vehicles you wish to use.
9. Other methods of getting your trades executed: Determine whether your broker has contingency measures such as touch-tone phone trading; things like this will prove helpful in the event you have no access to a computer.
10. Freebies: Though not entirely a big deal, free money is free and stress-relieving.

A final word: if you make less than 20 trades annually, never mind the cost; focus instead on customer service.

Socially Responsible Investing (SRI): The Basics

Some people see investing as more than a rate of return but as a way where one’s values and beliefs are reflected and practiced. Socially responsible investing or SRI is a growing strategy that integrates financial with social and environmental objectives. Those who are considering investing in SRI need to know ten basic tips.

1. Define goals: Determine what you want to achieve based on your values and principles.
2. Choose an approach: SRI has three non-mutually exclusive approaches: 1) Portfolio screening either excludes (negative screening) or includes (positive screening) some companies from your list of prospective investments; 2) Best practices classification chooses firms that rank high in environmental, governance, social, or financial criteria; 3) Shareholder status usage to monitor and influence management through direct engagement of proxy voting.
3. Select an Appropriate Benchmark: Use either SRI or traditional benchmarks to evaluate a business’ performance according to whether they adhere to your defined goals and principles.
4. Choose an SRI Rating Firm: Select the best firm that can supply SRI ratings that help you implement a feasible SRI strategy.
5. Investigate SRI Vehicles: Pick individual securities that rank high based on realistic criteria and expectations.
6. Evaluate SRI Options in Your 401(k) Plan: Check your 401(k) plan to evaluate whether mutual funds screened are consistent with your goals and values.
7. Fees: Bear in mind that socially responsible mutual funds or ETFs pay higher management fees, ranging from about 0.40-1.00% of portfolio value.
8. Be realistic in performance expectations: Like other investment vehicles, be realistic in the performance of your investments. While possessing similarities, realize that an SRI does not perform like your traditional mutual funds.
9. Diversify: Come up with a well-diversified portfolio to reduce risk.
10. Consult an Investment Professional: It is important to consult with a competent and trust investment adviser to help you navigate and execute SRI goals.

Five Changes to Post-Recession Investment Thinking

After the recession, several traditional modes of thinking about investing have changed. Below are five examples that investors can learn from:

1. Asset Allocation

CONVENTIONAL WISDOM: Traditional thinking says mixing stocks and bonds in a portfolio should be done according to an investor’s age and risk tolerance. Hence, young investors were encouraged to own growth stocks before transitioning into the more secure bonds and blue-chip company investments.

NEW THINKING: Bonds are the way to go. Barclays Capital U.S. Aggregate Bond Index indicates a 14% increase in bonds since 2007 October, while stocks dipped 28%. This is why investors have poured in $209 billion into bond mutual funds compared to the 200% more attractive stock funds before.

2. Stock diversification

CONVENTIONAL WISDOM: Maintaining a diversified portfolio will arm you in bear markets and assure the best returns. In the event of a downturn, rely on “value” stocks, while during the good times, maximize your gains by investing in “growth” stocks.

NEW THINKING: The fact remains that it will take several years before a full economic recovery. Experts predict more volatility and an unsteady recovery, instead of a consistent climb upward. It depends on what kind of economy emerges after the downturn.

3. Alternative Investments

CONVENTIONAL WISDOM: Build your portfolio around stocks and bonds and minimize investing in other assets.

NEW THINKING: Tangible assets like real estate and gold are the more secure option. Consider not only your home, but other forms of real estate and gold bullion.

4. Dividends

CONVENTIONAL WISDOM: Dividend-paying stocks assure you steady income.

NEW THINKING: This is no longer a certainty after companies made several dividend cuts to conserve cash. The only thing still certain is taxes.

5. Risk

CONVENTIONAL WISDOM: Choose risk-free investments to protect yourself.

NEW THINKING: Nothing is risk-free anymore. Large money-market mutual funds like the Reserve Primary Fund have proven to be vulnerable to the financial crisis.

Seasonal Patterns: A Helpful Tool for Investment Analysis

When doing am overall market analysis, the primary factor must always be price or price movements, or the market trend. However, seasonal tendencies can be used as a secondary factor when performing your analysis as they reinforce your chances of securing a stronger position in the market. The technique to successful market analysis is to consider as many factors as possible. Supplement this with effective money management, and you have what it takes to become a successful investor.

There are recurring market cycles each year that create the so-called seasonal patterns. These seasonal tendencies are a major force in the market. You will be successful trading the markets when you work the odds to your favor prior to making a position. For instance, sugar tends to be priced lowest in September and highest in December every year. A smart investor would use this pattern to develop a good trade setup. The price of sugar starts hitting bottom-level in August to consolidate on a narrow channel through September before breaking out in October. To gain a strong position on the market, buy on the breakout in order to influence the price movement in your favor and gain protection in case the market opposes you. If the price of sugar monumentally drops, you can even make a fortune.

Other seasonal patterns of other markets include:

• soybeans are likely to be at their highest price level from May to July to drop from September to October;
• crude oil prices are at their highest in September and October and at their lowest from December to February; and
• the U.S. dollar is at its strongest within the first half of the year before regressing into year end.

The catch: seasonality is not the only factor to consider. One should also ponder on the cash basis and other fundamentals.

Nine Top Investment Sins to Avoid

Before you tread on investing waters, it is helpful to know the most common pitfalls which every aspiring investor must avoid at all costs.

1. Doing nothing. Waiting for the grass to grow will not help you achieve a comfortable retirement.
2. Starting late. Procrastinating on an investment is the second biggest mistake to make. The earlier you start investing, the better off you will be.
3. Investing with unresolved credit card debt. Before even dreaming of a career in investing, pay off your credit card debt first. If you have $5,000 to investment and roughly the same amount owed to credit card companies, investing will surely be counterproductive.
4. Short-term investing. Invest money on shorter-term and safer havens for short-term goals. Invest the rest of what you have that you do not need for at least three years on the stock market.
5. Refusing free money. Never turn down a dollar offered provided it has no strings attached. Take advantage of what your company offers such as a 401(k) or similar tax-advantaged retirement savings plan with an employer match.
6. Playing it safe. This is a sin if you are young and you are missing out on investing in stock. Youth has its privileges. Be more of a risk-taker and reap long-term profits in stock. You have time on your hands to survive whatever the dips in the stock market and can choose to transition into bonds later.
7. Playing it scary. Being a daredevil is not always profitable. Do not risk all your money into a doomed investment.
8. Believing collectibles are investments. Collectible memorabilia or paraphernalia will not provide for you in the years to come.
9. Trading in and out of the market. Stick to a long-term investment for bigger profits. Trading in and out will burden you with fees later on and slice away your returns.

Goodbye, Bruce Wasserstein

I was saddened by the news of the financial mogul, Bruce Wasserstein. He was a legend in the private equity industry. Bruce Wasserstein led Lazard during its some of its most difficult times, and transformed the firm into a modernized, streamlined powerhouse. Here are some links to some articles about Bruce Wasserstein's passing:

Lazard Tribute to Bruce Wasserstein, veteran of 1,000 mergers (Guardian)

Remembering Bruce Wasserstein (Newsweek)

Budgeting Basics for Lazy People

Let’s face it. Most people find budgeting an unenjoyable activity. Many keep putting this task off until the next day, and end up never doing it. Are you that kind of person? If you are, Dayana Yochim of Fool.com has written a simple technique for the budgeting lazybones.

1. Know exactly how much you spend: To appreciate the virtue of saving, you must be personally aware of the excesses in your spending. List all your expenditures and categorize them. People who use cash can write down their expenditures on a day-to-day basis. Those who use credit or debit cards may get data from monthly bank statements. Input the data into a spreadsheet and be amazed.
2. Make your spending plan. After you get over the initial shock, you can start making your “spending plan.” The idea is to make a list of the most important purchases you need to make within the next three or six months. Include the physical purchases and financial plans you need to pay. This list will guide and direct your spending
3. Compute money to set aside. Single out the items on the list that will run you every month (ex. new tires), divide the total amount for that item with the number of months until you need them anew.
4. Put your savings on autopilot. To ward off surprise expenditures, hide your money from yourself. Open a separate savings account from the one you use for expenditures. You already computed how much money you need to put away monthly in
5. Instruct your bank to program recurring cash transfers from your main account to your separate savings account.
6. Discipline yourself. Use the “envelope method” to prevent mindless overspending. Compute the total weekly amount you need to spend on essentials. Categorize them and insert the allotted budget inside the envelope. This is the money you’re allowed to spend each week.

Vikram Pandit

Vikram Pandit is the CEO of Citigroup Inc., a New York-based American financial services company that holds the world's largest financial services network and controls over 200 million customer accounts in over 140 countries. As of 2008, the company became the world's largest bank by revenues.

Born to a well-to-do Maharashtrian family in Nagpur, India on January 14, 1957, Vikram Pandit seemed to have the world at his feet. After graduating from the Dadar Parsee Youths Assembly High School, Vikram Pandit flew to the United States to attend Gannon University.

Vikram Pandit chose to further his education at Columbia State University where he received his Bachelor's Degree in 1976 and his Master's Degree in 1977. In 1986, he received his PhD in Finance from the Columbia Business School.

Before his success at Citigroup Inc., Vikram Pandit worked as a professor at Indiana University Bloomington. It was not until 1990 that Pradit built his ties with Morgan Stanley, a diversified group of corporations, governments, financial institutions, and individuals. He became managing director and head of the US Equity Syndicate until 1994.

In 1994 he became head of head of Morgan Stanley's institutional securities division. At Morgan Stanley, Vikram Pandit was instrumental in the introduction of electronic trading as well as the creation of services that helped cater to hedge-funds. By 2005 he had served at the company as President of Institutional Securities, Chief Operating Officer of Institutional Securities, and Member of Management Committee. The Indian government gave him recognition with the Padma Bhushan award in 2008.

In 2007, Vikram Pandit joined Citigroup Inc. In December, the company appointed him as CEO. At present day he is the Head of Alternative Investments, Chief Executive Officer, and Member of Operating and Management Committee at Citigroup Alternative Investments. He is also the Chief Executive Officer of Citigroup Inc. Vikram Pandit is Co-Founder of Old Lane, LP.

Marc Lipschultz (KKR)

(This is my fifth article on the leaders of KKR. Be sure to check through my archives to find other KKR notables). -Stan

Being pioneers of the business, it is easy to assume that to replace Henry Kravis and George Roberts is something that the firm would rather not think about, especially now that the business is booming and opportunities seem to appear in every corner. KKR still looks ahead with gusto to the future with the two founders still at the helm of the ship.

But to give credit where credit is due, the two founding partners are not just resting on their laurels. Little by little, the two have taken steps in future-proofing their firm; in making sure that whenever they decide to give up the driver’s seat, they will be leaving the steering wheel at the hands of capable drivers. Many critics doubt that anyone can replace what the pioneers have done with regards to the business industry. But with these potential, one can see that they have at least a strong fighting chance to do so. One of the up and coming minds that play secondary captains to KKR’s ship is Marc Lipschultz.

Marc Lipschultz is one of the leaders of the energy industry group at KKR and was involved in all aspects of KKR's investment in International Transmission Holdings and the announced agreements to invest in UniSource Energy Corporation and Texas Genco. A graduate of Stanford University and the Harvard Business School, Marc Lipschultz also serves as member of the board of directors in companies like Amphenol Corporation and The Boyds Collection Limited. He also serves as a special advisor along with Henry Kravis for the company Accel KKR.

Dubbed as the rising star of KKR, Marc Lipschultz joined KKR 12 years ago, coming from Goldman Sachs. At 38, he has already been involved in many of the firm’s big company acquisitions like the $45 billion purchase of TXU, a Texas-based energy group.

Through hiring individuals with class like that of Marc Lipschultz, the doubts that the future of KKR after its founders have left will be forgotten in many of the critics’ minds.

George Roberts: Model Businessman

(This is my fourth article on my series of the people who run KKR. Check out my bios of Henry Kravis, Scott Nuttall, and Bill Janetscheck).

George Roberts is a revered businessman in the realm of financial industry. Heading the successful financial firm Kohlberg, Kravis, Roberts & Co (KKR) with Henry Kravis, he has obtained success through careful and efficient leadership. KKR has been involved in many of the last three decades’ biggest acquisitions, most notably that of RJR Nabisco in 1988. This aggressive yet effective leadership style characterizes George Roberts’ skills as a businessman. For more than three decades, this financial industry leader has influenced many of his colleagues with the way he carries himself and the firm.

George Roberts reveals that the firm’s culture depends on their reputation; that their word is their bond; and both are paramount to their success. These values upheld by George Roberts are reflected in the way their firm operates as a whole. KKR is responsible for many of the world’s largest and most complex private equity transactions worldwide. A reputation for integrity and fair dealing, the firm relies on this reputation to generate and add to their distinguished record of profitable and successful ventures.

Majority of his colleagues in the financial industry see George Roberts as a model businessman. Throughout his career, he has received accolades reflecting how excellently he works not only in his corporate job but also with activities beyond his business. He received his alma mater Culver Military Academy’s Man of the Year Award and has been consistently included in the Forbes List of Richest Americans, merits that are deservedly his to take. Guiding their protégés, both he and his cousin, Henry Kravis, are building up and ensuring the future of KKR. By being an example to the next generation KKR management, George Roberts will be able to retire knowing that he has maximized every opportunity that has come his way.

Bill Conway

Bill Conway is one of the three co-founders of The Carlyle Group, a Washington-based private equity investment firm that focuses on leveraged buyouts, growth capital, real estate, and leveraged finance investments. The company is one of the largest private equity firms in the world with nearly $50 billion under management.

Born William E. Conway Jr. in 1949 in McLean, VA, this business powerhouse led a pretty conservative life. His genius shone through early on as he received his undergraduate education at Dartmouth College and later on, his M.B.A. at the University of Chicago Graduate School of Business.

Bill Conway, who has 20 years of experience in the industry under his belt, always had an uncanny knack for business and finance. Before founding Carlyle with Dan A. D'Aniello and David M. Rubenstein, Bill Conway spent almost ten years with The First National Bank of Chicago. There he served an array of positions dealing with corporate finance, commercial lending, workout loans, and general management.

In 1981, after his time at The First National Bank of Chicago, Bill Conway served at MCI Communications, the second largest long-distance provider in the United States. At MCI, Bill Conway was instrumental in several of the company’s most significant acquisitions and divestitures. He served as a Vice President and Treasurer of MCI from 1981 to 1984. He then spent as three years the Senior Vice President and Chief Financial Officer.

In 1987, Bill Conway founded The Carlyle Group. The company continues to broaden its scope for potential investment opportunities. They also constantly improve their level of expertise in order to provide superior returns to investors. Presently, Bill Conway serves as Managing Director The Carlyle Group and chairman of Carlyle's investment committees.

Constant in his reserve, Bill Conway continues to support several local charities, especially those that support the causes of education and the Catholic Church.

Bill Janetschek

William J. Janetschek, better known as Bill, is the Chief Financial Officer of KKR & Co. L.P. (Kohlberg Kravis Roberts), one of the largest investment and merchant banking houses in the United States.

Bill Janetschek received his B.S. in Accounting from the College of Business Administration at St. John’s University, where he graduated cum laude in 1984.

Everyone who knew Janetschek in his early years agreed that he was destined for greatness. Right out of college, Bill set out for the fast-paced world of business and finance onboard the Tax Department at Deloitte and Touche LLP as a Staff Accountant. Shortly after that, he received his M.S. in Taxation from Pace University. He is a Certified Public Accountant.

Thirteen years after his introduction at Deloitte and Touche, and after being promoted to Tax Partner, Bill Janetschek left the company to join up with Kohlberg Kravis Roberts and Company.

Since Bill Janetschek joined KKR, the company has adapted deftly to the current economic condition. It holds over $60 billion in assets, management fees and profits from direct interests, adding to Bill’s already impressive portfolio. Due to its lineup of competent personnel, KKR & Co. L.P. has continually given clients superior returns through solid management, operational excellence, optimal capital structures, and a sound, long-term investment program in any situation regardless of fluctuations in equity markets, lending rates, or lending capacity.

Bill Janetschek was recently awarded the Alumni Outstanding Achievement Award of St. John’s University at the 28th Annual Alumni Convocation. He currently serves as a member of the President’s Dinner Committee and participates in the contribution of academic scholarships to exceptional students in the university.

I've recently profiled other KKR alumni, Henry Kravis and Scott Nuttal.

Stephen Feinberg

Stephen Feinberg is an authority in hedge-funds and private-equity arena. That is, if anybody can find him; the co-founder and CEO of Cerberus Capital Management, L.P. does all he can to remain invisible despite all the attention his success draws.

Cerberus Capital Management, L.P. is the company Stephen Feinberg founded in 1992 with William L. Richter. The 49-year old became a success story when he fathered one of the largest private equity investment firms in the United States with only $10 million.

You would think that little fact alone is enough for the press to be banging down his door in hopes of a picture. Stephen Feinberg does not see it that way. “If anyone at Cerebrus has his picture in the paper and a picture of his apartment, we will do more than fire that person. We will kill him. The jail sentence will be worth it,” Feinberg said at Manhattan’s Waldorf-Astoria in 2007. Though the Wall Street investors present responded with nervous laughter, the mysterious and guarded business powerhouse made his philosophy perfectly clear: reveal little as possible.

As the camera-shy head of Cerebrus continues to elude the press, the company continues to climb the ladder of success. On May 14, 2007 Cerebrus, along with 100 other investors, bought an 80% stake of Chrysler. Even as the firm made history, Feinberg was a no-show at the press conference saying, “we knew it would get an insane amount of press, and boy, we don’t like that.”

Nearly three decades after his years as a loner at New Jersey’s Princeton University, Feinberg has not abandoned his secretive style. His brilliance, success, and extremely private ways will always make him a target of the media. But until they catch him, Stephen Feinberg will continue to hide from plain sight.

Scott Nuttall of KKR

I've decided to run a series of profiles of the people who run the private equity firm KKR. Each of these investors has an extraoridnary story. I've talked about Henry Kravis. Today, I'll profile KKR Financial Holder Director Scott Nuttall.

Running a multi-billion dollar firm is not an easy task. To run it for as long as three decades requires hard work and a whole lot of business smarts. Kohlberg, Kravis, Roberts & Co is a company that has been running smoothly for over three decades now. Its founding partners have worked very hard since they started operations in 1976 to take the firm to where it is now. Pioneering the process of leverage buyouts, the KKR team has continually found success in every venture and company that they enter deals with.

The constant additions of young minds ensure the continuous success that the firm is experiencing. One of the top directors for the firm is Scott Nuttall. Fresh and still very young, Scott Nuttall is one of the leaders primed to take over the firm if ever the founders decide to step down from their respective posts.

Scott Nuttall is the one of the youngest members of KKR’s so-called “next generation”. He has been with the firm for 10 years already and first served as a member of the board of Willis, an insurance broker, while it was owned by KKR. Currently, his main task is as a member of the General Partner, Head of the Financial Services Industry Team of Kohlberg Kravis Roberts & Co. He also oversees the Global Capital and Asset Management Group and played a significant role in investments such as that of Alea Group Holdings, Amphenol, Walter Industries, and Willis Group. Aside from these, he is also affiliated with the firm’s funds, specifically the KKR Private Equity Investors and KKR Financial Holdings. Scott Nuttall also oversees the combined capital raising, distribution, and broker-dealer efforts for the firm. Likewise, he acts as the Secretary and Treasurer of KKR BDC Inc.

A graduate of the University of Pennsylvania, Scott Nuttall graduated with Summa Cum Laude honors.

Scott Nuttall and other brilliant young minds like him at KKR serves as an assurance that the future of the firm will continue to look bright.

Investment Pointers for Every Age

While all people share and are governed by a similar economic and investment climate, age groups experience different economic situations, risks and opportunities. Thus, the young and old may vary in terms of financial focus and investment opportunity. Money Magazine’s Peter Freeman gives the following investment pointers for those in their 20s, 30s, 40s, 50s and 60s.

1. The 20s. People from this age group are rookies to the workforce and have just started to generate income. Moreover, they have semi-permanent relationships. The financial focus at this age is to save up for a deposit on a home or to pursue an investment that appeals to one’s lifestyle. Prior to building wealth, they must either control or erase credit card debt. They may also consider investing in equity funds to build deposit.
2. The 30s. At this age, people have either settled down, have children, or bought a home. The main concern is how to secure renovations, reduce mortgage, and acquire or upgrade to a better property. Main threats to this age are downsizing and inflation, so taking out income insurance and saving up for emergencies are recommended. Those who are still single may pursue aggressive investments (geared share funds, portfolio or direct share investments) with extreme care.
3. The 40s: Financial stability during the 40s depends on how well you managed your money during the past decade. As the kids are grown up and education becomes more expensive, budgeting is of extreme importance at this age. High income folks may expand their investment portfolio.
4. The 50s: Establishing your own business is advantageous at this age. Children are married and enjoy financial independence, ergo, reduced expenses. Higher salaries are also enjoyed.
5. The 60s and later: The main focus at this age is how to maximize one’s savings in order to continue generating post retirement income. People usually build investments around allocating or complying pension in order to maximize tax and social security.

Saving Money and Mother Earth in Ten Easy Ways

Feeling helpless against the recession and climate change? No need to be. One can perform simple lifestyle changes that will not only battle climate change but expand your personal savings as well. Patti Prairie, CEO of Brighter Planet, suggests 10 doable steps that will save you a whopping $2500 and a total CO2 emissions reduction of 19,419 lbs. a year.

1. Reduce, reuse, recycle: Buy less or reuse items. When you do buy something, go for bargains or discounts. Do trade-ins for non-essentials, or donate them to charity or thrift shops. Save $564 (2902 lbs).
2. Drive with efficiency: You can extend the life of your car and reduce CO2 emissions by driving smoothly, keeping your tires inflated always, reducing idling, and driving below 55 mph. Save $385 (2882 lbs).
3. Reduce air travel: Land travel is the way to go. If flying is inevitable, choose daytime, economy class, and direct, non-stop flights to trim your emissions. Replace air travel with Web, phone or video conferencing once a year. Save $347 (2492 lbs).
4. Laundry changes: Cut your wash-and-dry laundry load by half. Just wash the other half with cold water and hang to dry. Save $287 (322 lbs).
5. Eat less meat: Cut your carnivorous intake to just 3 times a week. Save $285 (1107 lbs).
6. Commute: Twice a week, you can commute, take public transportation, or carpool. Save $276 (1177 lbs).
7. Save water: Switch to inexpensive shorter showers or use low-flow shower heads to conserve water. Save $194 (2123 lbs).
8. Light up: Change your lighting with compact fluorescent bulbs to conserve energy. Save $188 (1429 lbs).
9. Heating and cooling: Install a programmable thermostat for heating/cooling efficiency. Save up to $131 (1413 lbs).
10. Power use: To conserve power and lengthen the life of your appliances, make use of power strips, power management settings on your PC, and unplug charges. Save $64 (743 lbs).

Kevin Landry

Kevin Landry is CEO of TA Associates, one of the oldest and most significant private equity firms in the world. The firm focuses its attention on making investments in private companies and helping them build their businesses.

Kevin Landry did not start out as the success he is today. At one point, he was just a 16-year old boy who literally had his head in the clouds. On his father’s Cessna airplane, you could say that Kevin Landry really had nowhere to go but up. After a short stint in the army, he was hired fresh out of the University of Pennsylvania’s Wharton School of Finance by TA Associates founder Peter Brooke in 1968. He often talks of it as his only white-collar job.

Over the many years in business, TA Associates’ strategy has evolved and Kevin Landry has been onboard every step of the way. It became clear right away that with his down-to-earth character, coupled with his preference for informality, that he would go places even with his feet planted firmly on the ground.

Under his leadership, TA Associates has adapted a more conservative approach that is better suited to the aggressive industry of today. Landry takes it upon himself to make sure that the company does not get caught up in the hubbub.

TA Associates, which holds $10 billion in assets under management, stands out from other private equity firms because of their thorough investment practice. While other private equity firms acquire more than 50% in debts on a regular basis, TA Associates’ does not go up to more than 30%.

Kevin Landry was also on the board of directors of several companies like Ameritrade Holding Corporation, Biogen, Alex Brown Incorporated, Continental Cablevision, Keystone Group, Standex International Corporation, Instinet Group, the National Venture Capital Association, and SBA Communications.

Five Tips for Picking an Investment Partner

If you have succeeded in forming a company without external financing, there is great likelihood that you will attract private equity investors. When the time has come to consider an investment partner, selecting who to choose will be a major decision. Here are five tips to ensure you pick the best investment partner:

1. Know your needs. It is important to determine exactly why you are raising capital. Is it for personal liquidity, growth equity, a management buyout, or a combination of all three? Before making the big decision to gather outside financing, understand what business opportunity confronts you. Only then can you determine the type of capital required and the right investor.
2. Evaluate each firm's track record. Choosing the right firm requires diligence. If you must, evaluate data on each firm, such as size, stability, capital resources, and track record. Be aware of the firm’s success history and level of experience with businesses related to your own. Assess the firm’s capacity to deliver returns for both investor and business owner.
3. Make sure the culture fits. Find a private equity firm you can work hand-in-hand with. Conducting interviews with CEOs of the firm’s portfolio companies can give you a feel of what working with a particular firm would be like. Narrow down your choices to firms who can provide capital and keep your management team in control of decisions.
4. The value of personal trust. Chemistry is a must when assessing a potential investment partner. Among the questions you can ask are: Does the firm operate with honesty and integrity? Do we share common ethics? Do we like them as people?
5. Look for stability. Stability helps raise follow-up capital as well as provides potential for growth. Monitor retention of personnel as well as investors. Determine if there is a succession plan crafted for smooth transition of the firm to the next owners.

Kevin Griffin: A Career in Success

You could say that Fennebresque & Co. founder and Managing Director Kevin Griffin has been around the block in the world of investment banking and corporate finance. The rise of the company is the latest notch on his belt of experience. Having marked more than 12 years in the industry, with seven dedicated exclusively to the middle market, Griffin is the embodiment of genius and hard work, proving that even in this competitive world, small steps still count.

Kevin Griffin’s brilliance sets him apart even as he received his education. In 1999, he received a Master of Business Administration degree from the University of Chicago Graduate School of Business where he graduated with honors. Prior to that, he studied at The University of North Carolina at Chapel Hill where he received a Bachelor of Science degree in Business Administration.

Before the emergence of Fennebresque & Co., Griffin served as a Partner and Vice President with McColl Partners, an investment bank that provides services to middle-market companies and financial institutions. AT McColl, he was responsible for creating and executing middle market Mergers and Acquisitions transactions.

Before his years with McColl Partners, Griffin worked in the M&A and corporate finance divisions of Lazard, JPMorgan, and Bank of America in New York, Chicago, and Charlotte. Even further back, Griffin began his career as an investment banking analyst with NationsBanc Capital Markets in Charlotte, where he concentrated on fixed income products for real estate.

At Fennebresque & Co., a company that provides middle market advisory services in order to aid clients in the evaluation and execution process of financial transactions, Griffin belongs to a team of senior-level investment banking professionals who are objective, creative, and committed to providing effective advice to clients.

Kevin Griffin is also connected with several professional and civic affiliations including the Association of Insolvency and Restructuring Advisors, the Charlotte Country Day School Alumni Council, the Charlotte Youth Basketball League, and the Myers Park United Methodist Church.

Nelson Peltz: From Truck Driver to Brand Builder

Nelson Peltz is not the man one would think of when he drives into an Arby’s. His name does not explode in your mind as the All-American Roastburger does in your mouth. It should though --- Nelson Peltz is the man behind Trian Partners and Triarc Cos., two related firms that focus on food and beverage operations. They own restaurant franchises such as Arby's, Wendy’s, TJ Cinnamon, and Pasta Connection.

Not what you would expect of a billionaire, the 64-year old’s silver hair, deep voice, handsome features and compelling nature are not all that set him apart from all the other big shots on Wall Street. The success story that is Nelson Peltz goes beyond mere genius. Nelson Peltz is defined not only by his hardworking and competitive nature, but also his devotion to the people nearest and dearest to him. Before seeing his empire launch in the 1980s, he enrolled at the MBA program at the Wharton School of the University of Pennsylvania. Here, his path to success hit a speed bump when he had to drop out to drive trucks for his father’s food-distribution business. Now with sons of his own, Nelson Peltz has made sure that his boys never have to go through the same.

Insightful and a natural dealmaker, Nelson Peltz is able to focus on the bigger scheme of things. After dropping out of college in 1962, he was able to turn his family’s little frozen-food distribution business into the largest distributor in the Northeast. In 1985, Nelson Peltz assembled Triangle Industries, the largest manufacturer of tin cans, containers, and packages of tin in the United States. Building companies from the ground up since he was out of high school, it is no wonder that Nelson Peltz has lived his life knowing business inside and out.

Looking back on his truck-driving years, Nelson Peltz makes no apologies. He has been known to say, “I believe in pay for performance.” In the years since then, it is evident in the pay that the performance is nothing short of extraordinary.

Henry Kravis: LBO Pioneer

(This is the first in my series of profiles of big time private equity investors. I've done a piece on Ken Mehlman already, so I decided to continue with other major figures of KKR. Enjoy!)


Henry Kravis has mastered the art of leverage buyouts and takeovers. With George Roberts and Jerome Kohlberg, Henry Kravis founded KKR, a firm capitalizing on leverage buyouts and reselling companies for profit. Since its foundation, the firm has had more than 30 company buyouts and has invested over $90 billion in these ventures reaping profits for the firm and their investors. In 1987, Jerome Kohlberg retired from the firm and Kravis was left with his other partner, George Roberts. In 1988, the two of them led the takeover of RJR Nabisco for $25 billion dollars, the biggest acquisition of its kind during that time.


Henry Kravis graduated as an economics major at Claremont McKenna College and spent his summers working in Wall Street and companies like Goldman Sachs, where he learned the movements of the financial industry. After he graduated, Henry Kravis worked at Madison Fund where he fine-tuned his skills and knowledge of the financial industry. It was in this job that he learned decision making with regards to buying stocks and companies. He took his Masters degree at Columbia and went back to working for Madison Fund. He then transferred to Bear Sterns where he met Kohlberg and with Roberts, founded their own company in 1976. And the rest, as they say, is history.

Henry Kravis has been a staple in the Forbes list of richest Americans because he has continued to be passionate about his craft. Likewise, he remains one of the pioneers of leveraged buyouts. Alongside JP Morgan, he is considered one of those who significantly changed the financial industry landscape.

Taking over a company and turning it from struggling to profitable is a difficult task. A business venture is not like your normal walk in the park. It takes a lot of work; long and very hard work. It takes risks; risk that the company you obtain have a 50-50 chance of being a bomb. It takes research and carefully calculated moves. It is pressure exemplified. Henry Kravis, without a doubt, is the greatest master of this extremely difficult art.

Check out this great interview of Henry Kravis and George Roberts on YouTube.

Three Essential Investing Tips

True, most people understand the concept of investing: exchange your money today for a company you hope will earn you more money over the coming years. While this may seem simple, what we have seen in reality suggests that doing it “right” and succeeding in it is far from easy. Those who have proven their mettle have done it differently from in their own ways --- take Warren Buffett, James Simons, and George Soros, who have made it big with varying approaches to investing. As the market evolves and becomes more complex, every investor, whether freshman or veteran, needs three essential tips to secure a return on their investments.

1. Know what kind of an investor you are and make sure your investments are consistent with that. Is your personality fit for a “speculator,” looking to maximize on short-term movements? On the other hand, are you the “investor”; more interested in buying stocks off a great business to hold on the long-term? Your chances of succeeding depend on how and where you put your money on the market.
2. Think independently and avoid becoming a market lemming. The thing that draws the crowds is not always the wisest thing to follow. This particular bandwagon syndrome that focuses on short-term results makes investors “act like a herd of crazy lemmings.” It pays to be independent in making decisions. Take Warren Buffett’s example. During the tech boom, almost everybody placed bets on short-term tech companies while Buffett stuck to his long-term investment methods on “boring” companies like Gillette. Rookie investors criticized Buffett for his “relic” style. Eventually, the tech bubble burst and Buffett proved them all wrong.
3. Do not rely too much on stock tips. Sure, stock tips can help point you in the right direction, but it is wiser to research on a stock first and buy it for a good reason.

Investment takes practice. Eventually, you will get better at it, especially when you unfailingly consider these 3 essential tips in your decision-making.

Warren Buffett: The World’s Richest Success Story

The success story behind Berkshire Hathaway’s Warren Buffett---who is also the company’s largest shareholder and CEO---spans back to his years packing groceries at his grandfather’s grocery store. Buffet showed maturity beyond his years when he decided that he would rather make money than play games with the other children his age.

Born Warren Edward Buffett on August 30, 1930 to a stockbroker-turned-Congressman, it is no wonder that Buffett showed an amazing flair for business and numbers at such an early age. At 11 years old, he jumped into the world of high finance by buying three shares of Cities Service that he later sold. He immediate regretted the decision as the numbers for Cities Service soared. Buffett learned his lessons earlier than most, paving the way for the plethora of critical real-world decisions he was going to make.

Warren Buffett was educated at Woodrow Wilson High School, Washington, D.C. after his father was elected into Congress. He received his college eduation at The Wharton School, University of Pennsylvania then later at the University of Nebraska where he received a B.S. in Economics. Choosing to further his education, Buffett enrolled at the Columbia Business School where he graduated in 1951 with an M.S. in Economics.

Warren Buffett experienced a variety of jobs before he landed himself at Berkshire Hathaway. Fresh out of school, he worked as an investment salesman at Buffett-Falk & Co., Omaha until 1954. From 1954 to 1956, Buffett served at Graham-Newman Corp., New York as a Securities Analyst. From 1956-1969, he sat as a General Partner at the Buffett Partnership, Ltd. Since 1970, Buffet has served at Berkshire Hathaway Inc., Omaha as its Chairman and CEO.

Berkshire Hathaway Inc. is a conglomerate holding company that oversees and manages a number of subsidiary companies. Since coming onboard, Buffet has been instrumental in driving the company to the colossal status it stands at today.

In 2008, Warren Buffet was ranked number one on Forbes list of World’s Billionaires making this the richest success story in the world.

Six Mutual Fund Investing Tips You Need Now

Mutual funds are great investment vehicles. They combine money from hundreds and thousands of investors to create a financial portfolio of stocks, bonds, and real estate, among others. Moreover, every investor gets a slice off the total profits. In order to succeed in mutual fund investing, here are six important tips:

1. Keep ongoing expenses as low as possible. Closely monitor sales charges and other fees of your mutual funds. This is crucial for newbie investors who want to keep their own money working for them as much as possible.
2. Be wary of short-term performance. Do not be overwhelmed by spectacular one-year performance figures. In evaluating funds fit for long-term investment, look at past performance in terms of return, within three, five, or ten years. Moreover, you also need to assess how consistent the return is comparatively to similar funds, as well as to the overall market.
3. Evaluate your manager’s track record. Check the track record of your fund’s manager. Pick a manager with experience of five years or more who has worked on a particular fund, follows a consistent strategy, and has delivered impressive returns for long periods.
4. Develop automatic plans. Set up a mutual fund using an automatic plan with your fund company or employer. If you can, use your 401(k) plan to have automatic deductions on your paycheck before taxes.
5. Monitor your fund's performance. Monitor your mutual fund’s performance monthly, or at the least, quarterly. This will enable you to make decisions such as whether to increase your investment or to sell. Compare your fund’s performance with other funds as well as with the overall market.
6. Diversify. One of the most attractive features of mutual funds is that they are usually diversified. Based on economic and historical data, it is wisest to diversify by using asset allocation (as stocks, bonds, and cash equivalents).

Going Green and Saving Money in 10 Simple Steps

Switching to simple and doable initiatives can save you money and reduce carbon emissions at the same time – approximately $2500 and 19,419 pounds of CO2 for a year. Patti Prairie, CEO of Brighter Planet tells us how.

1. Be frugal: Be wary of what you buy. If you must buy items, purchase them at little or no cost. Trade in what you don’t need or donate them to thrift shops or charities. Savings: $564, 2902 lbs.

2. Change driving habits: A few driving tips - drive smoothly; keep tires inflated; avoid idling; drive below 55 mph - to help your pocket and the environment. Savings: $385, 2822 lbs.

3. Save up on travel: If you must fly, choose direct non-stop flights. Fly economy class and book daytime flights to reduce your share of emissions. Use the Internet, phone, or video conference in lieu of air travel once a year. Savings: $347, 2492 lbs

4. Adjust laundry: Washing and drying eight laundry loads weekly is costly. Wash half of that load with cold water and hang them to dry, and you will cut costs. Savings: $287, 3211 lbs.

5. Reduce meat intake: Limiting your intake of meat to three times a week can save you money and reduce methane gas. Savings: $285, 1107 lbs.

6. Commute or carpool: Commute, take public transportation, or carpool two days a week to save up. Savings: $276, 1177 lbs.

7. Save water: Shift to shorter showers, or inexpensive low-flow shower heads that consume only half of the water compared to profligate counterparts. Savings: $194, 2123 lbs.

8. Use CFLs: Outfit your home with compact fluorescent and other energy-saving bulbs. Savings: $188, 1429 lbs.

9. Intelligent heating and cooling: Have a programmable thermostat installed to avoid heating/cooling when your house is empty or when you are asleep. Savings: $131, 1413 lbs.

10. Power down: Use power strips, power management settings for computers, and unplug chargers to prolong the life of your appliances and reduce emissions. Savings: $64, 743 lbs.

Top Ten Investment Strategies from Warren Buffett

Readers get a glimpse of how Berkshire Hathaway’s Warren Buffett generates wealth in John Train’s book “Midas Touch.” The following are the top ten investment principles used by Buffett himself.

1. Buy a share as though you were buying the whole company. Determine how an enterprise is worth but do not rely on formal financial projections or mathematical formulae. Invest in “a business you understand, favorable long-term economics, able and trustworthy management, and a sensible price tag.”

2. Volatility does not create risk. A serious investor sees opportunity in volatility.

3. Value should include “growth at a reasonable price” or GARP. The ideal companies have a business “moat” that has steady and reasonably predictable growth. In the long run, these businesses are more tax-efficient and more convenient than one bought at a bargain.

4. Invest on what you know best. Refrain from seeking the “newest” thing because it is too risky. Buffett's biggest investments are firms founded in the 1800s, such as American Express, Wells Fargo, Procter & Gamble, and Coca-Cola. Said Buffett: “Startups are not our game.”

5. Avoid investing in bad industries, or turnarounds. It is not sound to invest in a business that requires a revival.

6. Seek out businesses that can reinvest at high rates of return over long periods. Avoid investing in low-margin businesses that require cash from you periodically and can expect only modest rates of return.

7. Do not sell a great stock just because it has doubled. Its value could go up when you least expect it, sometimes going up 20 or even 100 times during the next generation.

8. Never offer your own underpriced stock for the fully valued stock of an acquisition candidate. You will end up on the losing end of the bargain.

9. Avoid long-term bonds. Given how easy it is to inflate currencies, this is not a wise move.

10. Invest like a fanatic. Concentrate relentlessly on how you can transfer wealth to your own pocket.

KKR’s Ken Mehlman and the EDF: Green Portfolio Project

You don't normally associate tree huggers and green activism with pinstripe suits and private equity financing, but Kohlberg Kravis and Roberts (KKR) is breaking stereotypes with its innovative Green Portfolio Project. KKR, led by the legendary financial wizard Henry Kravis, understands the Environmental Movement is not some momentary fad; recycling, renewable energy, energy efficiency, air pollution and waste reduction are fast becoming the normal way of life rather than an "alternative" way of doing things. Think of it this way...we don't think twice about women having the right to vote, or that the FDA ensures food and drugs are safe. But in their time of their implementation, these normal standards were considered radical and revolutionary. So it will be with Environmentalism. And KKR recognizes this<.a>.

KKR's Green Portfolio Project is a joint effort between KKR, the Environmental Defense Fund, and the companies in KKR's portfolio to adopt environmental best practices. Ken Mehlman, the Head of Global Affairs for KKR, recently announced how KKR is working towards a greener planet. KKR and the EDF have set up a series of environmental measuring tools to The first phase of the Green Portfolio project involved three companies: US Foodservice, Primedia, and Sealy Mattresses. US Foodservice saved $8.2 million in fuel costs and cut 22,000 metric tons of carbon dioxide emissions in 2008 by simply improving the efficiency of their truck fleet. Primedia, a publishing company, saved $2.9 million by reducing its paper use by 3,000 tons.

Ken Mehlman said these Green Portfolio initiatives were "good examples of how smart companies can cut costs and support the environment."

The Green Portfolio Project is still rolling along. Five more companies have joined the Green Portfolio: Accellent, Biomet, Dollar General, Hospital Corporation of America (HCA), and SunGard. (You can click on each company logo to get the details of their environmental initiates).

KKR's push for Green Investment was inaugurated in its surprising takeover of TXU, the Texas Utilities company. Cooperating with the EDF, Henry Kravis made sure TXU adopted several environmental principles, including reducing the number of coal-fired plants that company wanted to build. From that PR success, KKR saw the long-term wisdom of adopting green best practices. That's possibly why they hired on Ken Mehlman, former Republican Party Committee Chairman and an experienced environmental lawyer. You may or may not agree with Ken Mehlman's politics, but his organizational skills and environmental credentials can't be denied. Whether you're a Republican, Democrat, or independent, the future definitely hold stricter environmental standards, and Ken Mehlman will be the voice promoting this new movement in environmentally responsible investment.

So you want to make a surefire investment? I'd bullish on KKR and its Green Portfolio companies...and I bet Mother Nature is, too!

Recommended Reading: Private equity – Easing the barbarians through the gate: An excellent overview of KKR's ethical practices and new attitude towards responsible investing.

Ken Mehlman will be speaking at the Fortune Brainstorm Green 2010 conference.

Check out this video about the Green Portfolio Project entitled "Ken Mehlman of KKR and EDF Members Discuss Partnership"

The Procrastinator’s Guide to Budgeting

When it comes to budgeting, there are two camps: those who keep track of what they spend and balance their checking accounts promptly, and those who keep putting off these tasks until tomorrow. Dayana Yochim of Fool.com wrote an easy-to-follow and systematic guide to govern everyday spending for the procrastinator.

Step 1: Take a snapshot of your spending
Be aware of your own spending habits. People who spend using their credit or debit card may review raw data from monthly statements. Those who pay in cash can write down their daily expenses. Using a spreadsheet, categorize your expenditures and be shocked at how much money you are throwing away.

Step 2: Plan your next shopping spree
Once the initial shock recedes, start working on your “spending plan.” Make a list of all the important purchases you need to make in the next three to six months, including physical purchases or financial plans. This simple list will serve as a tangible reminder of your money goals and keep you focused on what to spend on.

Step 3: Do some simple division
Identify what items on the list will run you on a monthly basis. Divide the total amount for that item by the number of months until you need them.

Step 4: Set up a no-brainer savings system
Keep your cash out of your spending reach. Create a separate savings account from the one you use for daily expenditures. In Step 3, you already computed how much you need to set aside monthly. Get help from your bank and set up automatic recurring cash transfers from your main account to the separate savings account.

Step 5: Stop mindless overspending
Use the “envelope” method of budgeting. Compute a reasonable weekly amount you will allow yourself to spend on (food, transportation, housing, entertainment). Create envelopes for each category and put the allotted weekly amount per envelope. Once the cash on that envelope is depleted, so is your stipend for the week.

The Investment Phases of LIfe

Peter Freeman of Money Magazine summarizes the status, characteristics and investment strategies for different age groups. While there are differences in every group, all are bound to the same economic and investment climate. In the end, financial success depends on how we make decisions based on our assessment of risk and opportunities present.

The 20s: People are relatively new to the workforce and are semi-permanent, relationship-wise. The main concern is saving up for a home deposit or an appealing investment. Before they can start building wealth, the first step is to control or eliminate credit card debt. Building a deposit through investment in equity funds may be a good strategy.

The 30s: Most people in their 30s have settled down, have children and bought a home. The focus is how to reduce mortgage, do renovations, or upgrade to a better property. They are recommended to take out income insurance to counter the threat of downsizing. Moreover, they must save enough for emergency expenses. Single people in their 30s may engage in aggressive investments, including geared share funds or direct share or portfolio investments, with a great deal of caution.

The 40s: Financial comfort at this age group is reflective of how restrained spending was for the past decade. The 40s are a difficult time financially because the kids are grown and education is more costly. Budgeting is crucial. Those who have high incomes may, however, gear up for expanding their investment portfolio.

The 50s: At this time, the children are financially independent, family costs are reduced and salaries are higher. Wealth creation at this period is advantageous and favorable for establishing your own business.

The 60s and later: The 60s is a time to invest one’s savings to generate income during retirement, or to maximize age pension. Investments are usually built around how to allocate pension in order to maximize tax and social security efficiency.

Tax Advice from Roni Lynn Deutch

I ran across this interesting video on the Wall Street Journal. It's an interview featuring the remarkable "Tax Lady," Ms. Roni Lynn Deutch. (I'm linking to her amazing blog, which has a plethora of great tax and financial advice.

In addition, Roni Lynn Deutch offers six options for the tax-wary Americans indebted to the IRS. Roni Deutch suggests resolving tax debts immediately in order to avoid burdensome penalties and interests that go with delays. After checking the numbers on the tax bill, one may choose from among these six options:

1. Pay in Full. Deutch says this is better than “IRS collections hounding you day and night, putting liens and levies on everything you own.”
2. Offer in compromise. If full payment is not doable, an offer in compromise, or paying a lump sum for a smaller amount than was originally owed, could help.
3. Installment agreement. The IRS will calculate based on your income less your “allowable expenses” to determine how much your monthly payment will be.
4. Streamlined installment agreement. Streamline installment agreements apply to tax bills under $25,000 and based on the amount to pay off taxes within five years or less.
5. Currently not collectible. The IRS will stop squeezing money out of you if you prove your money is exhausted on “living expenses.”
6. Wait it Out. Although tax debts expire 10 years from the date of assessment, this might be a gamble on your part since the IRS is shrewd and may extend the life of your tax bill.

Roni Lynn Deutch has written several articles in Women Entrepreneur, including how to prepare audit-ready tax returns and keeping good tax records.

And did you know Roni Lynn Deutch was the first girl to play in an all-boy's Little League in California? No kidding!

Ten Best Nuggets of Financial Wisdom Ever

Some of the world’s experts, money managers, and ordinary folk who have had experience share some of the best financial tips ever on saving money, spending money, and building wealth. I found these words to live by on MSN's Money Central site at http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/TheBestFinancialAdviceEver.aspx. Enjoy!

“No matter how much or how little you make, always save a little bit.” Whatever money comes your way, you should make sure to set some aside. You can never be too broke to save.

“Live like a broke college student.” Young people tend to find the most affordable ways to live. Do with less in order to save money.

“Know the difference between needs and wants.” Control your spending. Distinguish real needs and mere wants. Ask yourself “What do you need that for?” before you spend your money.

“Think of the true cost.” Before purchasing an item, think of the true cost – the price tag plus time and energy you will expend over the item.

“Don’t co-sign a loan.” Co-signing a loan puts your good credit in the hands of someone who could smear it by with a single late payment.

“If you need more money, then go out and make more money.” The fastest way out of debt and into building wealth is to generate more income.

“You pay in advance for capacity.” Don’t drive yourself crazy. Hire and pay someone to help you out to make your small business grow.

“Own your own business - including the building it's in.” Money manager David Bach learned that the wealthiest owned their own businesses, including the buildings, which eventually ended up valuing more than the business.

“Don't gamble more than you can afford to lose.” Control risk whenever you can. Be realistic when you do take it.

“Prince Charming isn't coming.” Don’t rely on other people to save you from financial woes. In order to achieve financial security, your only armor of protection is you.

Five Things to Learn From the Rich

Many of us may not live to be as wealthy as George Soros or Donald Trump, but there are habits that we can learn from affluent people in order to achieve financial freedom, and possibly, become millionaires as well.

1. They give back to charity. The wealthy tend to give away more, as a way of paying it forward for the financial success they reaped. Households with assets worth at least $500,000 donated 6% of their incomes in 2004, while those having a net worth of more than $5 million gave away 6.1%.
2. They own businesses. Surprisingly, the Federal Reserve estimates that over 12% of American families own all or part of a privately-held enterprise. The wealthy tend to own closely-held or family-owned businesses, and go forward with diversification once their wealth becomes too concentrated in a single investment.
3. They borrow strategically. The extremely rich tend to owe less money than the average person or owe installment debt. They are more likely to have mortgages than average households and carry more real estate loans than the general population. Although most of them own their homes, they nonetheless invest in real estate expecting higher rates of return.
4. They do not blow a lot of money on cars. With a few exceptions, the rich spend only a small proportion of their wealth on vehicles, roughly 2.4% of their net worth according to the Federal Reserve.
5. They are almost always homeowners, and many own investment property, too. Almost all people in the upper 10% own their homes. Almost 40% of them invest in real estate, but the bulk of their wealth comes from investments. The rich apportion their wealth as thus: 46% (stocks and bonds, managed accounts, IRAs, mutual funds, deposits and alternative investments); 10% (pensions and defined-contribution plans like 401(k)s); 6% (insurance and annuities).

To achieve a richer life, one must take strategic risks, give back, live within your means, and invest.

You can read up on other prominent financial leaders in my other site, Private Equity and Finance News.

Hottest Stock Tips

The market is seriously volatile as we enter the latter stages of the Great Recession. I say "latter stages" because I'm confident our economy will eventually recover. There is just too much innovation and wide open markets for the market not to recover.

But the world of finances is going through a massive shift right now. I would say the markets are going through the biggest shift since the mid 1980s, when technology stocks starting coming to forefront and changing the way private equity flows. There are several industries to watch out for, and the sky's the limit on these growth markets.

1. Green/Renewable Energy: President Obama has called on massive government investment in green energy, including wind, solar, and geothermal options. So I would say "buy" for established companies that are expanding green energy, such as GE, First Solar, and Siemens. There are some excellent websites that are devoted to the subject of green energy, such as Seeking Alpha and Green Chips Stocks. Electric cars are hot commodities, too. Check 'em out!

2. Private Equity Companies. After the economy bottomed out last year, private equity firms such as The Blackstone Group, Carlyle, and Berkshire Hathaway took a serious hit. But now as the stock market is recovering, private equity firms are part of America's return to prosperity. For example, The Blackstone Group, led by Wall Street legend Stephen Schwarzman stumbled to an all-time low of 3.55...and now it's trading for nearly $15. And it's still proably going up. Even investment firm villain AIG, now helmed by Robert H. Benmosche is not doing too doing too badly. From a low of $3, it's now at a robust $28. Keep looking for private equity firms to make big gains in the year.

3. Technology Stocks: Companies like Dell, Microsoft, and Intel took a big hit during the Great Stock Crash. The companies remain profitable and stable, and were only innocent passerbys as their worthy stocks were dragged down. Now their stocks are recovering, and are still are a bargain.

In conclusion, I feel the stock market will continue to regain as the economy slowly gets back on its feet.

A Scientific Way of Saving Money

A Scientific Way of Saving Money

Understanding the fundamentals of how money behaves can help us control and accumulate it. One way to do this is to view money as nothing but a form of energy. Using principles of energy, there is a scientific way of ensuring personal savings.

Rule 1: Energy attracts more of itself. If you are currently in debt, there is a possibility of attracting more debt. Similarly, if you have money, you will attract more of it. In order to attract more money, you must first accumulate it. This will start a chain reaction and allow you to accumulate more wealth.

Lesson 1: Open a savings account. This is an important step to building wealth because it gives the money somewhere to go.

Rule 2: Energy follows the path of least resistance. This means that money naturally flows to the areas that are of immediate need. Essentially, it is you who decides where the money goes and how much needs to be allocated. The more needs you identify, the more money is expended. Wealth is accumulated only when inflow exceeds outflow. Thus, in order to accumulate wealth, fewer needs should be identified.

Lesson 2: Prioritize your needs. People have varying needs, but those who tend to accumulate more wealth are those with very few needs. Those who live beyond their means tend to end up broke or bankrupt.

Rule 3: Energy requires exchange. In order to receive something, something must be given in exchange. You simply cannot gain from nothing. This may explain why people who are banking on the quick way to earn the buck, such as lottery tickets or slot machines, invariably end up broke. Those who do win in the lottery also tend to lose them all back. Accumulating wealth by chance is not sustainable.

Lesson 3: Invest and manage your money well. Wealth is acquired by employment, savvy investments and good management. The more you give, the more you will receive.

Seven New Tips Toward Financial Security

How can you become financially secure considering the current chances in economic climate? Money Magazine keyed in tools on understanding the risks that the new economic climate poses including tips on adjusting to them in order to attain financial security. The article challenges people to get rid of old assumptions and take in new ones. It highlights seven new ways to achieve financial security.
Risk tolerance is about making or missing an important goal. Analyst T. Rowe Price suggests that relying on the volatility of the markets is not a wise move. The market lesson is: weigh the amount of risk you can lose and still meet your basic goals.

Save and rely on cash more. Analysts recommend redefining the scope of savings to include significant expenses such as tuition, a wedding, or a down payment on a house. Build an emergency fund before anything else. Consider your earnings potential. Instead of focusing on stocks and investments, think about human capital, or your capacity to earn while working on a job. Evaluate how secure your human capital is and make adjustments. Borrow cautiously. Be very conservative in borrowing for a mortgage or for college. Get a mortgage you can afford and put a 20% downpayment. Be wise about owning a home. Face the fact that owning a home will not make you rich but it has advantages. Have modest expectations when you do decide to purchase a home. Diversify. The best way is to go out and buy 16 new mutual funds that can kill two birds with one stone. T. Rowe Price recommends investing 20% of assets in emerging markets and the remainder in developed countries. Do not retire early. Delaying retirement for one year can increase your retirement income by 9%.