This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Eric Gleacher Going Public

Add Eric Gleacher to the list of 1980s Wall Street superstars to throw his weight behind a publicly traded buyout vehicle.

Gleacher Partners filed with the Securities and Exchange Commission to raise $500 million for a business development corporation to invest in mezzanine financing of private companies. Gleacher, who became famous running the mergers-and-acquisitions department of Morgan Stanley, joins his old Drexel rival Leon Black and Kohlberg Kravis & Roberts in advancing private equity's cause on public markets.

Gleacher Partners is about the 10th private investor to set up a business development corporation -- similar to a closed-end investment fund -- since November, when private equity firms caught on to the public alternative to costly and slow private fundraising.

The firm did not return calls seeking comment, though it is now in a quiet period as it prepares the actual initial public offering. Gleacher's best-known private investments include California Pizza Kitchen (CPKI), WebMD (HLTH) and Cosi Sandwich Bar (COSI).

Gleacher Investment Corp., as the publicly traded entity will be known, will invest in debt and equity securities of privately held middle-market companies with about $25 million to $500 million of annual revenue, or about $5 million to $50 million of annual operating earnings, according to the filing documents. Because of the way the law governing business development corporations works, Gleacher can invest up to 30% of its capital however it wishes, and must invest the remaining 70% developing domestic companies.

KKR, Black's Apollo Management and the Blackstone Group were among the first to file initial public offering documents for their public funds. They were quickly followed by smaller but similarly well-known private investment groups such as Evercore Partners, Porticoes Investment Management and Gores Technology Group, prompting some concern that supply would get ahead of demand and that later entrants to the party would fail to raise much capital.

But the recent performance of Apollo Investment Corp. (AINV - Get Report) probably has investors rereading their prospectuses. All the business development filings feature this line of bold type: "Shares of closed-end investment companies frequently tend to trade at a discount to their net asset value. These factors will increase the risk of loss for purchasers in this offering."

Shares of Apollo, which raised $930 million on strong investor interest, hit a high last month of $15.44, were trading Tuesday at $13, just a few weeks after they hit the market.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AINV $5.68 -0.53%
AAPL $94.19 -1.04%
FB $118.06 0.54%
GOOG $695.70 0.48%
TSLA $222.56 -4.20%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs