Private Equity
Reading today's Lex column on private equity, I was reminded of an old Stephen Colbert line about President Bush: "He believes the same thing Wednesday that he believed on Monday, no matter what happened Tuesday." The shoddy column was about last week's sit-down between a group of big buyout firm executives and big pension fund managers, over the issue of fund structure guidelines published last September by the Institutional Limited Partner Association (ILPA).
2 min read · 06 April 2010
Sun Capital Partners is in talks to sell weight-loss bar maker Elan Nutrition to ConAgra, according to an FTC filing. No financial information was disclosed, and a source says that the deal is not yet finalized. Sun sponsored a leveraged buyout of Elan Nutrition -- then known as Five Star Brands -- back in May 2003. The turnaround firm's initial outlay was around $18 million, including funds for capacity improvements that enabled Elan to begin producing upwards of 300 million bars
1 min read · 06 April 2010
My weekly video segment for Reuters is about private equity exits, and whether or not 2010 is meeting raised expectations. Per usual, we taped just a few doors down from the home office: Watch more peHUB videos
1 min read · 06 April 2010
I spent a bit of time yesterday perusing U.S. VC performance numbers from Cambridge Associates, which are available on the firm’s website. Data is through the end of Q3 2009, and is predictably depressing. If you exclude 10-year returns (because they still include part of dotcom-delirious 2000), the net means either are negative or pathetically positive. For example, the best number would be six-year net mean IRRs, which come in at just 5.65 percent. And those are pooled. If you look instead at vintage years, it’s even worse (best one post-1998 is 3.75 percent). All of this plays into the “VC model is broken” mantra that many now consider conventional wisdom.
2 min read · 06 April 2010
Venture capital has spent the past year becoming more accessible, via institutional efforts like office hours and the emergence of omnipresent superangels. Another crack in the old boy network comes today, via the launch of a P2P startup equity platform called Microventures. The company is essentially an equity riff on Prosper or Kiva, in which startups are able to request between $50,000 and $250,000 from accredited investors. MicroVentures takes a fee only if the issuer raises its desired amount, and provides free services that ensure the issuer is in regulatory compliance. "What we're doing is creating a marketplace for entrepreneurs who don't have the means to go out and find venture capitalists, and for investors who might not have access to
1 min read · 05 April 2010
More than 600 peHUB readers took over The Bell-in-Hand Tavern in Boston last night, for our latest peHUB Shindig. Plus, we raised more than $5,500 for the New England Home for Homeless Veterans. Great to see so many of you there, and sorry we'd been gone for so long (our last Boston event was in Nov. '08). And for those of you in San Francisco, we'll see you on April 14 (it will sell out, so get your tix fast). A final thanks to our Boston sponsors: .406 Ventures, Atlas Venture, Capital Dynamics, SecondMarket and Velocity Financial Group. Get photos after the jump...
1 min read · 01 April 2010
I'm busy putting together the morning email (and a bit hungover from last night's Shindig), but wanted to quickly post a pair of Q1 data reports that hit my inbox this morning. Analysis will follow a bit later. First up are VC-backed exits, which had a banner quarter. And I don't just mean compared to the past year's slog. The National Venture Capital Association and Thomson Reuters (publisher of peHUB) report higher VC-backed M&A exits than ever before in a single quarter, with 111 deals generating $5.86 billion in disclosed value. VC-backed IPOs also rebounded, with nine offerings raising more than $930 million. Download the numbers here. As for private equity fundraising, Preqin reports that 79 funds raised $50.4 billion in Q1. This is a slight bump over the prior quarter. Worth noting that Preqin data includes all types of
1 min read · 01 April 2010
Kleiner Perkins is about to begin its double-secret meeting about "developments in the mobile content revolution." Specifically, it seems that the Silicon Valley-based venture firm is doubling the size of its iFund to $200 million. It also will expand its focus from iPhones to also include iPads. Not really worthy of a press conference, is it? On the other hand, the double-secret meeting strategy has gotten the technorati to cover the news, so it works from a pure PR level. Kleiner partner Matt Murphy signaled that such a move could be coming, in a VCJ story from April 2008: “There’s no hard cap on this,” says Matt Murphy, a KP partner and lead investor for the iFund. “If we see opportunities beyond the $100 million, we’ll increase the allocation.” Worth noting that the original iFund was a carveout of an existing KP fund, rather than money specifically raised for Apple-related purposes. Our assumption is the same is true here, which makes us wonder what sector is getting deemphasized. Could it be cleantech?
3 min read · 31 March 2010
Yesterday, a colleague and I spent most of the day trying to learn what happened at ILPA’s meeting of the minds between big buyout and big pension. Lots of emails, lots of phone calls. I even postponed a trip to purchase sandbags. In retrospect, it was probably a misuse of my time. And not just because my cat can now bypass his water bowl and lick straight from the floor. The much-ballyhooed meeting (yes, I did some of the hoo’ing) seems to have been much less than it was cracked up to be. Its purpose was to discuss the ILPA guidelines, but I’m told that the issue of fees – arguably the most vital piece of LP/GP interest alignment – wasn’t actually discussed. Moreover, giant firms like Bain, KKR and TPG weren’t in the room (which apparently was inside of the Times Square Westin).
2 min read · 31 March 2010
A group of LBO bigs and pension fund chiefs today are meeting somewhere in New York City, to discuss the contentious issue of fund terms. The GP side will be repped by folks like David Rubenstein (Carlyle), Glenn Hutchins (Silver Lake), Jim Coulter (TPG) and Chip Kaye (Warburg Pincus). The LP side will be repped by Joe Dear (CalPERS), John Breen (Canada Pension Plan) and Ahmed Gubash (Abu Dhabi Investment Authority). Two quick thoughts, and then more via video: (1) A select group of GPs and LPs are going to secretly gather to discuss industry-wide fund terms, in order to preclude claims of collusion. Just let that sink in. (2) CalPERS and ADIA have stakes in Carlyle, while CalPERS also has a stake in Silver Lake. Not just LP interests, mind you, but actual pieces of the management companies. What side of the table will Dear and Gubash be sitting on?
1 min read · 30 March 2010
