Private Equity
1 min read · 12 January 2010
Fidelity this afternoon announced that the U.S. team of Fidelity Ventures was spinning out into an independent, Boston-based firm called Volition Capital. The new group will continue to manage 20 Fidelity Ventures portfolio companies in the U.S., and jointly manage six European portfolio companies with what is now being called Fidelity Growth Partners Europe. Volition's four managing partners are: Larry Cheng, Andy Flaster, Roger Hurwitz and Rob Ketterson. Other staffers include Geraldine Alias, Sean Cantwell, Don Haile, Anne Mitchell and Jill Roosevelt. I spoke briefly with Larry Cheng, who tells me that the move was made for two reasons: (1) The Fidelity Ventures team was itching to run their own show; and (2) An independent firm would make it easier to raise third-party capital (Fidelity Ventures as solely funded by its parent).
3 min read · 11 January 2010
From public service to private equity and back again? That was the tidy career circle recently offered to Bob Grady, the former Bush 41 official who went on to spend more than nine years as a venture capital and growth investor with The Carlyle Group. As first reported by Private Equity Online, and since confirmed by peHUB, Grady recently declined an offer by recently-elected New Jersey Governor Chris Christie to serve as the Garden State's next trasurer (an appointed position). Grady originally is a Jersey boy, having grown up in the same town as Christie and beginning his career in state politics. More recently, he agreed to co-chair a budgetary task force for Christie, and could eventually serve on some sort of economic advisory council.
2 min read · 11 January 2010
As regular readers surely know, I have two primary addictions: Politics and sports (well, three addictions if you include cheese, but that isn’t relevant to this particular item). So when the two overlap with what I get paid the big bucks to cover, I get all geeky about it. That’s why I devoted a few posts late last year to the senatorial aspirations of Steve Pagliuca, the Bain Capital managing director who also owns a slice of the beloved Celtics. Now that the campaign is over – Pagliuca came in fourth out of four major candidates in the Democratic primary – I wanted to know what he took away from it, the pros/cons of a PE pro running for public office and if he might run again. Get his thoughts after the jump...
3 min read · 11 January 2010
Benchmark Capital will not raise a third fund focused on Israel, according to an Israeli press report. Silicon Valley-based Benchmark launched its Israeli affiliate in 2001 with a $260 million fund, and raised a $250 million follow-up in 2005. In a June 2008 interview with Private Equity Week, Benchmark partner Steve Spurlock said that Benchmark Israel would return to the fundraising market in 2009. This was despite the Israeli affiliate's then-recent loss of two founding partners: Mark Kremer and Nachman Shelef. It's unclear if Fund III launched and stalled, or never began at all.
2 min read · 10 January 2010
2009 was supposed to be a banner year for private equity secondaries. Buyers had raised record amounts of fund capital (i.e., purchasing power), while the recession had generated a profusion of liquidity-challenged sellers. Supply and demand and all that jazz. But it just didn't happen. NYPPEX Private Markets later today will release data on the 2009 secondaries market, showing a 39% decrease in indirect secondary transaction volume between 2008 and 2009. We're not allowed to publish the report itself, but can share some of the highlights: *** There was $12.3 billion of Indirect secondaries activity in 2009 (i.e., selling of LP interests), compared to $20.31 billion in 2008. The primary driver here was a lingering bid-ask gap, in which both buyers and sellers assumed the other would budge. NYPPEX suggests that some late-year movement did come from
2 min read · 08 January 2010
Readers regularly email to pick apart my support for changing the tax treatment of carried interest from capital gains to ordinary income. Almost all of the correspondance now relates to venture capital, as buyout and hedge fund managers seem to have accepted that their loophole is closing. Here's a recent email from reader Bill: “One can argue whether or not preferential capital gains tax treatment, in general, is a good idea, but to split hairs and say that one set of managers (entrepreneurs) deserve it, but another set of managers (VC, PE guys) do not, evidences not just a fundamental lack of appreciation for what financial managers do within the context of a modern economy but also a willingness to sustain a clearly illogical and contradictory position in order to maintain some romantic, populist and dated notions about the relative social value of different kinds of labor. Therefore I challenge you: If you truly believe that investment GPs should have their carried interest taxed, then take the next logical step and declare your opposition to the favorable tax treatment for corporate managers' equity stakes.” Bill articulates the single stickiest wicket in my argument for changing carried interest tax treatment. And it’s one I’ve wrestled with a bit this morning. Here's what I've come up with so far:
3 min read · 08 January 2010
There has been lots made of the past year's anemic VC-backed IPO market, but let's leave the past behind and look at what could be coming up over the liquidity horizon. Our records indicate that there are 28 VC-backed companies currently in registration to price IPOs on U.S. exchanges, representing more than $3.75 billion in targeted raise. More than half of the registrations occured last quarter, but there's one from 2008 and even a pair from 2007. Also worth noting that for all the talk of 2010 being the year of the social network-related IPO (Facebook? LinkedIn? Zynga?), no such company is currently in registration. Closest we get are a pair of online marketing/advertising companies. Get the full lot of them after the jump...
10 min read · 07 January 2010
Deb wrote in the fall about VC-backed geothermal project companies, including concerns that their drilling efforts could cause earthquakes or other losses of terra firma (see here and here). She specifically focused on AltaRock, which had been drilling in Northern California geysers. AltaRock suspended and then abandoned drilling in the geysers due to "physical difficulties," but the Department of Energy nonetheless opted to complete its review (in part because it gave AltaRock and others grant money for alternate drilling projects). The result were several new requirements for any company engaged in geothermal drilling, with or without government funding. These include stress test and simulation requirements and an expert review of those tests by a DoE panel. (Download the letter here)
1 min read · 07 January 2010
Loopt, maker of a mobile social mapping application, is suing a recycled apparel maker called LooptWorks. The former claims that the latter has ripped off its trademarked logo, including usage on the type of social networks where Loopt makes its home. Loopt has raised more than $20 million in VC funding from firms likeSequoia Capital and NEA. Download the lawsuit here.
1 min read · 07 January 2010
