Lots of blog buzz today about a NY Times story on Al Gore's cleantech investments, and if such activity is ethically compatible with his lobbying for environmental legislation that could benefit his portfolio. Not surprisingly, critics see irreconcilable conflict. The Drudge Report, for example, has a breathless header about "Gore's big profits from global warming." Other outlets have used the term "profiteer," and even the NYT regurgitates the meme that Gore wants to become the world's first "carbon billionaire" (without noting it was first coined by virulent climate change skeptic Sen. James Inhofe). The NYT also rehashed Rep. Marsha Blackburn asking Gore about conflict of interest during a House hearing earlier this year, but without her daft question of whether or not Gore was "aware of... capital firm Kleiner Perkins." For the record, Gore has been a partner at venture capital firm Kleiner Perkins for more than two years, and listed as such on the Kleiner Perkins website.
2 min read · 03 November 2009
Gotham Private Equity Partners has launched as a New York-based private equity firm focused on the middle and lower middle-markets. Equity checks of between $10 million and $50 million per investment, in exchange for a control position (with some growth equity exceptions). The core quartet is one we last discussed in early 2007, when they bolted Trimaran Capital Partners to work for Columbus Nova. Before that, they had worked together in the leveraged finance group of CIBC. I spoke yesterday with managing principal Steven Flyer, who didn’t really explain the departure from Columbus Nova, except to say that it was to take advantage of the opportunity to hang their own shingle in the midst of a market dislocation. The Gotham team will not continue to manage investments made while with Columbus Nova.
1 min read · 03 November 2009
Marlin & Associates, a mid-market investment bank, today released a paper that asks if the M&A rebound is for real. Download it here.
1 min read · 03 November 2009
Big day over at Greylock Partners, which has closed a new fund, hired a big-name new partner and agreed to move its East Coast office from staid Waltham to trendy Cambridge. Fund XIII came in at $575 million, which is significalty higher than the $500 million Greylock raised for its twelfth fund in 2006. Partner Bill Hellman says the added capital was the result of existing investors requesting more than their pro rata shares. Greylock doesn't take pre-determined management fees -- it operates on year-to-year budgets -- which might help explain why liquidity-drained LPs were ready to open their pocketbooks for Greylock. Greylock also announced that LinkedIn co-founder and executive chairman Reid Hoffman has signed on as a partner. LinkedIn is a Greylock portfolio company, having first raised money from the firm as part of a $10 million Series B round in 2004.
5 min read · 02 November 2009
It’s been at least two years since I first began wondering when a private equity pro would get accused of insider trading. Really thought it would happen sooner – and on a grander scale – but better late than never (caught). The first to fall is Chen Tang, who briefly served as chief financial officer with buyout shop Friedman Fleischer & Lowe. He had previously served as CFO for both Prospect Venture Partners and Tallwood Venture Capital. Tang and several others were accused last Friday by the SEC of making more than $8 million in “illicit profits from unlawful trades in the securities of Tempur-pedic International, Inc. and Acxiom Corporation.”
2 min read · 02 November 2009
Last week, I noted a cleantech panel comment that some European infrastructure funds were proposing 15-year and 20-year investment cycles. While unusual, it apparently isn’t novel. Nor is it only for infrastructure. It appears that New York-based buyout firm Lindsay Goldberg effectively has a 20-year investment cycle for its third fund, which closed earlier this year with $4.7 billion in capital commitments. The official fund term is 10 years, but a source says that it includes 10 one-year extensions at the GP’s discretion. As the firm says on its website:
1 min read · 02 November 2009
4 min read · 02 November 2009
Chatting with Reuters about new VC performance data, which remains depressed due to the lack of VC-backed IPOs. Per usual, Carrie Lee is in New York and I'm just a few paces away from the home office. Video after the jump...
1 min read · 31 October 2009
Dominick DeChiara is leaving Nixon Peabody, where he has served as chair of private equity, in order to join fellow law firm Winston & Strawn. Also leaving will be partner Brad Vaiana, and Nixon Peabody's "core deal team." The moves are effective at the close of business today. DeChiara says that the Winston platform is better in that it offers his team a "deeper bench." Indeed, Winston's private equity deal team in Chicago may actually be a bit larger than what DeChiara has been leading in New York. He declined to comment on what his team's departure means for Nixon Peabody, which already has removed DeChiara and company from some -- but not all -- parts of its website (get his cached bio here).
1 min read · 30 October 2009
A wise man once wrote: “You take the good, you take the bad, you take them both and there you have the facts of life.” Ok, it was Alan Thicke, but the message of balance served Jo and Tootie well for nine years. And it’s one that I wish NY Post reporter Josh Kosman had kept in mind when writing The Buyout of America, which hits book shelves next month. Kosman’s basic thesis is that leveraged buyouts are bad news, and that their practitioners either don’t care or have deluded themselves otherwise. Moreover, he believes that around half of all PE-backed companies will collapse between now and 2015, triggering another economic meltdown and adding two million folks to the unemployment rolls. Pretty cataclysmic stuff. To be clear, I don’t dismiss any of the above out of hand. After all, we heard some of these same warnings two and three years ago about collateralized mortgage obligations, and look where ignoring that got us. We keep hearing big-name PE execs talk about how most of their portfolio debt doesn’t come due until at least 2013, as if 2013 is some vortex into which loan obligations will somehow disappear. The bill always comes due, and the only thing that will prevent certain mega-LBOs from failing will be a bailout by their existing sponsors. Moreover, I fully support Kosman’s distain for PE firms that charge various fees to their portfolio companies’ balance sheets, particularly transaction fees and monitoring fees (no matter the particular GP/LP split). A private equity firm simply should not be able to preemptively profit on a company it helps bankrupt. Just because you can, doesn’t mean you should.
3 min read · 30 October 2009
