Private Equity
Late last year, I wrote about about my fruitless battle to obtain performance data on CalPERS' investments in the management companies of Apollo Global Management, The Carlyle Group and Silver Lake Partners. CalPERS had invested far more in each of these firms than it had in private equity funds, but for some reason released the former annually and the latter quarterly. Moreover, the Annual Investment Report was seven months old the day it was released, and 18 months old before being updated (reports published in January, based on data from the end of the previous June). My lawyers and their lawyers emailed back-and-forth, but we couldn't penetrate their stonewall (CalPERS' dual rationales -- trade secret and secondary sales -- were code for CYA from an embarassed investment staff). We considered pursuing the matter, but figured we'd first
2 min read · 16 February 2010
Edd Hendee, a vice president of acquisitions with Starwood Capital Group, died on Saturday after a skiing accident at Stratton Mountain in Vermont. Our deepest condolences to his family, friends and colleagues. Starwood Capital CEO Barry Sternlicht wrote the following, in an email sent out yesterday morning: "We at Starwood are mourning his enormous loss. We cannot comprehend the depth of the loss to his wife, Claudine, and three young children. I hired Edd straight out of business school and he had the dubious honor of working closely with me for nearly a year... As the years have gone by, I took tremendous pride in his growing accomplishments, his expanding and beautiful family, and his wonderful team spirit as he mentored our younger talent and served as a role model for any firm. We were lucky he chose us for the time he had. The laughter, the stress and the experiences we shared as we traveled the world together, I will never forget." Funeral and memorial services are currently being planned, and we will provide information once it is available. Rest in peace Edd.
1 min read · 16 February 2010
peHUB staffers weren't able to make it to Chicago for last Wednesday's Kellogg Private Equity and Venture Capital Conference, so a group of Kellogg MBAs offered to take notes and report back. Get notes on keynotes by Chuck Esserman (TSG Consumer Partners) and Dick Kramlich (New Enterprise Associates), plus reports from the following panel discussions: The Ovation Pharma success story, Consumer Internet, Digital marketing and LPs and the future of private equity. Big thanks to Richard Yan, Doug Potters, Jason Robinson, Joel Stanwood and Stephen Windsor.
1 min read · 15 February 2010
My weekly video spot with Reuters, this time discussing President Obama's proposal to eliminate capital gains taxes on small business investment. Per usual, filming a few yards away from the home office:
1 min read · 14 February 2010
Sequoia Capital's Heritage program has had more stops and starts than a game of Mother May I. Now it seems to be taking another giant step forward. For the uninitiated, Sequoia Heritage is an outsourced investment management platform for college endowments and other small institutions. Private equities, private equities, fixed income, absolute returns and real estate. Kind of like a baby Makena Capital. Actually, the Makena ties go deeper than just investment strategy. The original head of Sequoia Heritage was Eric Upin, former chief investment officer for Stanford University's endowment. The founder of
2 min read · 12 February 2010
Things must be getting lonely in the London office of venture capital firm Accel Partners, as peHUB has learned that partners Kaj-Erik Relander and Simon Levene both resigned within the past several weeks. No word yet on why they left, or if their departures were related. Relander was the more notable of the two, having joined Accel in 2001 after serving as president and CEO of telecom giant Sonera. He later was convicted by a Finnish court of having violated privacy laws while running Sonera -- the court found that Relander had ordered an illegal review of employee phone logs in order to determine who leaked information to the media about an internal company dispute -- but Accel never waivered in its support.
2 min read · 12 February 2010
Last summer, I was chatting with a venture capitalist during a tech conference, when Veoh Networks founder Dmitry Shapiro walked by. "Dead company walking," the VC whsipered. Seems he was onto something, as Peter Kafka is reporting that Veoh laid off its workforce yesterday and is expected to file for Chapter 7 bankruptcy protection. This comes less than a year after the San Diego-based company cut around one-third of its workforce and installed founder shapiro as CEO, but also less than a year after Veoh beat back a copyright infringement lawsuit brought by Universal Music Company.
2 min read · 11 February 2010
Stephen Schwarzman took to the WaPo op-ed page this morning, to argue that regulatory uncertainty is to blame for the contraction of bank lending to small and mid-sized businesses. This matters, he says, because a failure to reverse the trend would equate to a reversal of economic recovery. He writes: "These uncertainties, taken together, have severely hampered the ability of banking executives to plan how to run their businesses or even know what their businesses may include. Predictably, bankers are reacting to this unprecedented uncertainty by becoming conservative and cautious. The result is that there is less lending and less credit available." Schwarzman positions this message as coming from bank bigs themselves,many of who probably shared a banana or two during the recent World Economic Forum in Davos. And I don't doubt it, nor Schwarzman's assertion that continued lending declines could freeze what he terms an "incipient revival of the global economy." But here's what I don't get: Why doesn't that same uncertainty apply to large-market bank lending? Big buyout bosses -- including Schwarzman colleague Tony James -- have been saying for months that debt is available and that leverage ratios have returned to
2 min read · 11 February 2010
Solar market consolidation continued today with Silicon Valley-based CaliSolar agreeing to buy Ontario, Canada-based 6N Silicon. No financial terms were disclosed, but VC backers of both companies agreed to invest an additional $22.5 million. This puts CaliSolar's total VC funding at around $85 million, putting it in 18th place among all VC-backed solar companies. I figured it's worth taking a quick look at the top five, since they are the most likely private acquirers going forward:
2 min read · 11 February 2010
Intriguing legal kerfuffle in Israel, involving Sequoia Capital and portfolio company SDT, a five year-old maker of what one report described as a “backpack-carried digital nose that sniffs out improvised explosive devices.” SDT was founded five years ago via a merger between M.S. Tech and Israel Military Industries, and has since raised around $6.5 million from Sequoia's Israel affiliate and individual angels. But it has since fallen on hard times (financial crisis and all), and virtually ceased operations last summer. SDP's court-appointed receiver wants approval to sell SDT’s assets for a bit under $1 million to U.S.-based Rapiscan (subsidiary of OSI Systems), but claims that Sequoia and two other shareholders are interfering
1 min read · 10 February 2010
