I interviewed Bob Boldt yesterday, as part of Buyouts Texas. For the uninitiated, Bob is a former CalPERS staffer who went on to become chief investment officer at UTIMCO. He now runs the Agility program for Perella Weinberg, which basically tries to replicate the “large endowment” model of investing. Some quick hits from the interview: * Bob defended the endowment model, despite the current troubles faced by some of its practitioners. He says the key isn’t allocation, but trying to be a first mover into new asset classes. First into venture capital, first into private equity, first into emerging markets real estate, etc. He acknowledges that endowments didn’t act fast enough when they saw liquidity drying up, but still believes the model will prove superior over time. * Boldt left CalPERS in 2001, but did discuss the current pay-to-play allegations. “I can categorically say that no one ever told me that I had to make an investment... Sometimes members of the board would ask me to look at things, but never insisted that I recommend them.” He did say that the board once gave
2 min read · 16 October 2009
Greetings from Dallas, where Buyouts Texas has just gotten underway. Beginning at 10:45am ET is a fundraising panel, with: * Tripp Brower, Managing Partner, Capstone Partners * Colin McGrady, Managing Director, Cogent Partners * Kent Muckel, Chief Investment Officer, Baylor University * Bill Quinn, Chairman, American Beacon Advisors * Garth Troxell, Partner, Altius Associates Get the live-blog after the jump...
1 min read · 15 October 2009
Just got back to my hotel room in Dallas, and was greeted by an enormous stack of papers sent over by CalPERS. The first one is a press release, announcing that the pension system is "initiating a special review of the fees paid by its external managers to placement agents and their related activities." The rest appear to be disclosures made by various external managers about fees paid to ARVCO Financial Ventures, a placement agent led by former CalPERS board member Alfred Villalobos. peHUB had previously reported that these documents would be disseminated, and that current CalPERS board member Chuck Valdes is currently under investigation for accepting campaign contributions from Villalobos. The SEC and California Attorney General also are conducting investigations into possible pay-to-play at both state and municipal pension funds in California.
2 min read · 14 October 2009
peHUB is hosting a cleantech event in Boston later this month, with a focus on helping investors and executives navigate Washington D.C.’s regulatory and financial landscape. We’ve got a great panel but, truth be told, one of the first cleantech VCs I reached out to turned me down flat. His brief email reply was as follows: "Thanks, but no, not my thing, getting money from governments. Others are more expert and better at holding their noses." I didn’t think too much of his response at the time, except that it further confirmed libertarian sentiments that he’s expressed elsewhere. But then I (finally) got around to finishing Josh Lerner’s new book Boulevard of Broken Dreams, which focuses on the historical relationship between government, entrepreneurship and venture capital. One takeaway was that the VC – and others who think like him – are ignorant of the role that government has played in the VC industry’s formation and sustenance.
2 min read · 14 October 2009
Nearly three years ago, tech journalist Scott Kirsner wrote a blistering indictment of the Boston startup scene, titled "Can the Bay State Still Make the Big Time?" Suffice to say, he wasn't optimistic. Kirsner expressed particular concern with Boston's inability to produce "pillar companies" that “influence entire industries, attract talented people to Massachusetts and help retain recent college grads." He basically was yearning for the next Boston Scientific or Staples, but an IT version that could compete with the Cisco's and Google's of Silicon Valley. I agreed with Kirsner's diagnosis, but had a slightly different take on some of its underlying causes. For example, I wasn't sure that Boston's robust universities couldn't serve as adequate pillars. Moreover, Kirsner worried that Boston-area VCs were investing more in "products" than "companies" -- a malady that was hardly a local phenomenon (and is even less so today). Instead, I fretted about the lack of a local startup culture. Not just the timidity of many Route 128 investors, but the literal lack of forums/events where area entrepreneurs and investors could congregate (other than obligatory Christmas parties). Each new day was greeted with photos from some party in Silicon Valley the night before, while Boston entrepreneurs were lucky to run into someone at a bus stop on their way home.
2 min read · 12 October 2009
I am pleased to announce that Wednesday night's peHUB Shindig in Dallas is now sold out. Again. We ran through our first batch of tickets several weeks ago, but this morning found a few dozen more that were quickly scooped up. Per usual, ticket proceeds will be donated to a local charity selected by event attendees. We've gotten lots of good suggestions, and will whittle it down before the voice vote. A very special thanks to our Dallas Shindig sponsors: Landmark Partners, New Capital Partners and Staff One.
1 min read · 12 October 2009
CalPERS later this week is expected to release several documents related to placement agents who tried -- and in some cases succeeded -- in getting private equity fund commitments from the pension system. Nothing untoward in that, except that at least one CalPERS board member is being investigated, in part, for accepting campaign contributions from a placement agent who happened to have a batting average that would have made Ty Cobb blush. Some thoughts, from the laundry room studio:
1 min read · 12 October 2009
Venture capital fund-raising hit a 15-year low last quarter, according to data released this morning by the National Venture Capital Association and Thomson Reuters (publisher of peHUB). Just 17 U.S.-based funds raised $1.6 billion, which is the puniest display since Q3 1994 -- when 17 funds raised $938 million. I guess VCs could take a bit of solice that the most recent batch raised more capital per fund than did the 1994 crew, but that really would be damning with faint praise.
1 min read · 12 October 2009
Last month, CalPERS sent peHUB a list of private equity firms that used placement agents when pitching their funds to pension officials. It included the fund name, placement agent name and whether or not CalPERS invested. It also claimed to represent proposals received by CalPERS between the beginning of 2002 and the end of 2008. What I've since learned, however, is that the list was woefully incomplete. Take the example of Wetherly Capital Group, which we wrote about earlier today. CalPERS reported that it pitched 10 funds between 2002 and 2008, receiving six commitments (a steroid-induced batting average). But according to new documents obtained by peHUB, Wetherly actually pitched approximately 30 funds during that period -- including a couple of "missing" ones that received investments from CalPERS.
2 min read · 08 October 2009
I've been critical of Andrew Cuomo lately (does accusing him of quasi-extortion count?), but it's all flowers and laurels today. The AG done good. Cuomo and a bi-partisan group of state legislators have written a bill that would eliminate the state pension fund's sole fiduciary structure, and replace it with a board of trustees. It's about time. New York is one of just two states that don't have some sort of board structure, and it may not be coincidence that the other (Connecticut) also experienced a pay-to-play scandal related to private equity investments. “For decades, the State pension fund has been weakened and corrupted by the sole trustee model,” Cuomo said in a prepared statement. "It’s about as sensible as having a single lock on Fort Knox. Today’s legislation will ensure that the fate of our public retirement fund isn’t decided by one individual, and that the entire system is rid of the kind of pay-to-play that infected and derailed it in the first place.” There is also the reverse chicken/egg possibility -- single fiduciaries don't increase the likelihood of corruption, they just increase the likelihood of exposure
2 min read · 08 October 2009
