Three senior investment pros with in the CMS private equity group are leaving to form a new small-cap private equity effort, and already have made their debut investment. The news was announced earlier today in a mass email from Michael Rafael, a CMS director who is leaving alongside Daniel Eisenstadt (managing director) and Marc Nathan (director). All three will be partners with MDM Equity Partners, which "will invest in and operate small businesses." Rafael writes that the trio's first investment is in the veterinary services sector, without prividing additional details. The above photo is from the sparse MDM website, but appears to be for a hot dog shop in Albuquerque (we'll assume that Raphael was referring to literal animals, not metaphoric ones).
1 min read · 31 August 2009
Dear reader: I plead appalling naiveté when it comes to mark-to-market accounting. You see, I had assumed that FAS 157 would result in private equity firms using public market comps when valuing their portfolio companies. As such, my theory was that the S&P 500 losing more than 11% of its value in Q1 would be coupled by double-digit declines among typical PE portfolios. When that same index rebounded in Q2 by more than 15%, we’d see some corresponding leap in PE portfolios. Not a perfect mirror, of course, but at least something reflective. Silly me. New data from Cogent Partners shows that the median buyout fund write-down was -2.1% in Q1 2009, while the median VC fund write-down was -2.8 percent. In fact, only 15% of all funds examined by Cogent reported a percentage decline greater than that of the S&P 500.
2 min read · 31 August 2009
Gaia Arnaboldi has resigned as program manager for Adveq's fund-of-funds focused on the U.S. distressed and other non-traditional private equity markets, peHUB has learned. She plans to move into an operating role -- likely within the energy or environmental space -- but has not yet lined up a subsequent job. Arnaboldi originally joined Adveq in Europe, and then transfered to New York when the firm opened an office there in 2007. Her primary role is helping to oversee the Adveq Opportunity program, which includes a $170 million vehicle raised in 2005 and a $457 million vehicle in 2007. Expectations are for a third Adveq Opportunities fund to be raised soon, although it's unclear who will take Arnaboldi's spot.
1 min read · 28 August 2009
iWalk, a Cambridge, Mass.-based developer of wearable devices for human augmentation, has raised around $20 million in new VC funding, according to a regulatory filing. General Catalyst led the round, with partner John Simon taking a board seat. Other board members include William Doyle of existing backer WFD Ventures, and William Sahlman of the Harvard Business School. No longer listed is iWalk co-founder Nicholas Negroponte. iWalk's inaugural device is called the PowerFoot One (seen above), and is a self-contained robotic system that serves as a prosthetic ankle and foot for amputees. Company executive Rich Casler declined to comment, saying that the company is holding off on interviews until it puts out a press release next month. www.iwalkpro.com
1 min read · 28 August 2009
I recently criticized Georgia for being the only state to prohibit its public pension system from investing in alternative assets like venture capital and private equity. One thing I really wanted to know was if pension system officials were supportive of the ban, or if they'd advoated for a change. Sadly, I was unable to get anyone willing to comment on such matters. Today, however, I received a call from W. Daniel Ebersole, director of the Georgia Office of Treasury and Fiscal Services (he apparently was on vacation earlier this week). Ebersole said that he strongly supports a policy change, because a "modest asset allocation to alternative investments would enhance our performance through diversification."
1 min read · 27 August 2009
What follows are seven VC deals culled from recent Regulation D filings with the SEC. None of them has been otherwise disclosed: * ValenTx Inc., a Carpinteria, Calif.-based developer of minimally-invasive treatments for morbid obesity, has raised $20.29 million in new VC funding. The company previously raised around $7 million from firms like EDF Ventures, Affinity Capital Management, Kaiser Permanente Ventures, TGap Ventures and Sapient Capital Management. www.valentx.com * Seeo Inc., a Berkeley, Calif.-based lithium-ion battery developer, has raised over $8.6 million in new VC funding. Return backers include Khosla Ventures. www.seeo.com
2 min read · 27 August 2009
Some of my thoughts on yesterday's FDIC action, and on Wilbur Ross' reaction:
1 min read · 27 August 2009
There was a time, not too long ago, when readers railed against any mention of politics or government in this space. “They have nothing to do with investing,” was the common gripe (often followed by something about how I was to the left of Castro). Such complaints have since disappeared, of course, since government has become the equal third leg of a stool that once was tilted toward buyers and sellers. Nowhere is that more true than in the burgeoning cleantech space, where issues of government funding and regulation often are central to a startup’s business strategy. With that in mind, I’m pleased to announce the first-ever peHUB event to include actual content (don’t worry, there will still be plenty of time for boozing and schmoozing): Cleantech & Washington: Making Sense of it All The event takes place on the evening of October 27, at the Boston offices of law firm Bingham McCutcheon. We’ll begin with some late afternoon cocktails, followed by a panel discussion that will include: * David Brown: Partner & General Counsel, C Change Investments * Nick d'Arbeloff: Executive Director, New England Clean Energy Council * Pat Cloney: Executive Director, Massachusetts Clean Energy Center * Rob Day: Partner, Black Coral Capital * Scott DePasquale: Principal & Executive-in-Residence, Braemar Energy Ventures * Barry Direnfeld: Partner, Bingham & McCutcheon Yours truly will do the moderating duties. Following the panel, you’ll have plenty more time to network with local cleantech entrepreneurs, venture capitalists, attorneys and assorted hangers-on. Tickets are just $75 if you get yours before September 12. Please go here to register.
2 min read · 27 August 2009
The FDIC today will vote on new rules for private equity investments in banks, during a 3:30pm ET board meeting. As we've written before, these new rules will be tougher than the status quo, but looser than what was originally proposed at the beginning of June. I'm going to live-blog the proceedings, and hope you join in below: FDIC Board Meeting: Rules for Private Equity Investments in Banks
1 min read · 26 August 2009
Benchmark Capital’s Bill Gurley yesterday wrote on his blog that the VC industry is going to shrink substantially over the next several years. Specifically, he argues that large institutional investors will decrease their allocations to venture, although not abandon it entirely (due to CAPM and contrarianism). The typical reaction from readers -- including many of you who sent me emails -- was appreciative slobbering. I strongly encourage you to read what Bill wrote. Go ahead, I’ll wait. Ok, now let me tell you why I think he’s wrong. Not on describing the overall environment (he's got it nailed), but on what the end result will be. Specifically, I believe that the number of institutional investors cutting back on VC commitments will be small, compared to the number either maintaining or increasing their allocations. It’s easy for us to get caught up in the doings of big-name, liquidity-challenged endowments like Harvard and Yale, but they really are just a tiny drop in the overall LP bucket. In fact, all the Ivy Leaguers combined probably have less committed to venture capital than does CalPERS alone (and it recently increased its alternatives allocation)…
3 min read · 26 August 2009
