The purchase of a high-profile leisure facility. The man we were dealing with on the transaction side admitted that, while he had not changed his job, he had been part of six different reporting lines in eighteen months. The closing meeting where the valuation professional brought in had looked at room occupancy rates, what the market would bear in terms of service charges, location of said facility, etc. and came up with a valuation in the range of, say, 50-75m. There was significant IP inherent in this facilities brand name. An IP expert at the same meeting reckoned that if every last drop of goodwill was wringed out of the worth of this name (something the current owners simply weren’t doing), this IP was worth, at most, 25m.

At the end of the meeting, the valuation expert actually had to stand up and point out, explicitly, to the SWF representatives that the price on the table was 100m. There was a polite, but conclusive, dismissal of this point. No matter how bad the investment looked (and the other side were reaming them on every single point in the transaction I was aware of), they were going to go ahead with it, come hell or high water.

Point taken,(see also reply to Canned Heat)! Re Madoff, it appears that the losses (whatever they may turn out to be) are not so much losses by banks acting as principal, but as agent for their private banking clients. They may rsult from client claims and especially from loans made against Madoff collateral. Looks like the sort of money machines built out of CDO assets and money market liabilities the banks had on their own off-balancesheet balance sheets. Who knows what CIC’s subsidiaries (the state banks) my have done . Bright Sparks flying!

Looks like you know a little more than most of us. Once again, some of these funds (ADIA used as a generic term for large money with some sovereign or ruling family flavor and managed far from the public eye) should be able to act more opportunistically than a very bureaucratic public pension fund, but of course the extent to which they do, is as unknown (except to people who know a little more). And, yes, honor and shame can be important components of their inventive structures. And of course the only visible evidence (visible from space by now) of less than conservative investment is the UAE construction site called Dubai. Anyway, I should not have brought it up..

in fact, didn’t spielberg have some exposure too? boy, in such times you really got to wonder if the old boys club atmosphere of banking has really taken on new aspects?