If the proposed deal to bailout Trump Hotels & Casino Resorts Inc. is not a smash hit, Credit Suisse First Boston LLC might have trouble raising a fourth LBO fund.
Fund-raising efforts could be hindered by the turnover New York-based CSFB experienced last month, which came on top of a personnel drain that began when Donaldson Lufkin & Jenrette was acquired by Credit Suisse in November 2000, said Kelly DePonte, partner at San Francisco-based Probitas Partners, a San Francisco private equity placement agent.
"Turnover has been enormous, so much so that many of the people who did the good deals in the past have departed," he said. "I believe DLJ Merchant Banking is running low on money and would have to come back to market in the next few months to raise money. Unless the Trump deal turns into an instant winner with cash back to the (limited partners) quickly, I'm not sure that it has all that much impact on (future) fund raising."
Three partners — all managing directors of CSFB in the private equity group — left the DLJ Merchant Banking Partners III fund in July: Ari Benacerraf, Andrew Rush and David Wittels. They were replaced by David Burgstahler, David Durkin, OhSang Kwon and Kamil Salame, who were promoted to partners from director/principals. A fourth partner also left CSFB at the same time: Mike Ranger, co-head of the Global Energy Partners fund. Steve Webster, the other co-head of Global Energy Partners, will now be sole leader, said Victoria Harmon, spokeswoman for Credit Suisse First Boston.
The departures came eight months after the exit of Lawrence Schloss, the former global head of private equity who is credited with building DLJ's private equity group.
Ms. Harmon said Mr. Schloss was in a layer of management that was removed when CSFB's alternative's group was restructured in March, and he was not replaced.
Although Ms. Harmon would not comment on whether the departures would affect fund raising, sources close to the firm said that was speculation that shouldn't be given serious consideration.
