In the financial equivalent of a Hail Mary pass, HRJ apparently doomed itself by using the firm as collateral on a bridge loan as it was attempting to raise $250 million. It was able to raise only about half that amount — between $110 million and $130 million — yet it had committed the entire $250 million for investments, according to a report from Thomson Reuters.
"Yes, that's just as dumb as it sounds," wrote Dan Primack, the top private-equity analyst at Thomson Reuters, and founder and editor of the www.pehub.com Web site.
"It's very hard to kill off a PE firm," he said. "The significance here to me is that one is actually dying. This is an exceptional case."
Exceptional indeed. I wonder how some of their well regarded clients like Andre Agassi, Jerry Rice, Tim Duncan or Oscar de la Hoya feel about it? I don't care how tough Ronnie Lott or Harris Barton were in their prime, I wouldn't want to be the one to tell Oscar de la Hoya that you just lost a few million of his dollars. Ouch.