Blame the lawyers. It's a universal excuse, working for everything from contentious divorces to securities fraud. Now we can add rescinded fund commitments to the list. At issue is a $10 million commitment from the The San Francisco Employees' Retirement System to Domain Associates, a healthcare-focused VC firm that last week closed its eighth fund with $500 million. San Francisco's money wasn't part of the final stash, because the two sides reached an impasse over fiduciary responsibility language that the pension system insisted be in the final partnership documents. Details are still a bit fuzzy as to what specific fiduciary issues SFERS wanted beefed up, but peHUB has learned that the language was inserted by
1 min read · 17 August 2009
Yesterday, I wrote about how some of Sun Capital Partners’ investors are asking for a fund size reduction (talks are very early, with no actual proposals on the table). Here’s what one of its LPs said: “It’s really the larger LPs who are having liquidity issues, which is as much of a driver here as anything. They probably want all of their GPs to cut fund sizes, but you have to pick and choose.” This is the old denominator effect argument, in which exposure to illiquid PE investments has become more pronounced due to the falling value of public securities. It’s something peHUB has discussed and validated ad nausea, but are we nearing a point where it becomes more of an excuse than a legitimate pain point? After all, the public markets are up
1 min read · 13 August 2009
Sun Capital Partners has a new headache to worry about, in addition to its rash of bankruptcies, personnel defections and NY Post antagonists. Certain investors in Sun's $6 billion fifth fund have informally asked the firm to consider a fund size reduction. The discussions are still at a preliminary stage, without any formal proposals having been yet been presented. "It's really the larger LPs who are having liquidity issues, which is as much of a driver here as anything," says a longtime Sun investor. "They probably want all of their GPs to cut fund sizes, but you have to pick and choose... and Sun is an easy target right now." Why the bulls-eye? One reason is simple math: Sun has invested just around 26% of Fund V, which means there is plenty of dry powder that can be returned to sender. Moreover, the existing fund
2 min read · 12 August 2009
Yesterday we wrote about Kip Kirkpatrick, a co-founder of Water Street Healthcare Partners who recently announced candidacy for Illinois State Treasurer. In it, we noted that the local private equity community has rallied around Kip’s candidacy, including more than $35,000 in campaign contributions from his former Water Street colleagues. Other contributors include execs from firms like GTCR, One Equity Partners and Willis Stein. All of this made us wonder if these contributors were shooting themselves in the foot? Not because of Kip’s politics or potential job performance, but rather because he is basically running to become the state’s chief investment officer. If he wins, and if the SEC enacts those “pay-to-play” proposals regarding political contributions, then firms like Water Street and GTCR would be temporarily banned from raising money from public pension systems in Illinois… Are the contributions worth the risk?
1 min read · 12 August 2009
Venture capital performance deteriorated in Q1, according to data released this morning by Cambridge Associates and the NVCA. It was the third-straight quarter of decline, although the rate slowed, and was seen over the quarterly, one-year, three-year, five-year and 10-year horizons (mild improvement for 15-year and 20-year). Get the full report after the jump...
1 min read · 12 August 2009
Updated Deloitte LLP is in the process of shutting down its Fund Placement Advisory Group, peHUB has learned. The London-based effort employed 10 professionals, and focused on helping to secure fund capital for mid-market buyout firms in Europe. No word yet on why the effort is folding, but some of its key members have already found new employment. Group head James Coleman has joined Probitas Partners, where he will lead the U.S.-based firm's European efforts from London. Director Vincent le Hodey also will join Probitas, with a focus on European relationship management and secondary fund advisory. The pair will bring at least two of their Deloitte mandates with htem over to Probitas, although both are said to be near completion.
1 min read · 12 August 2009
Kip Kirkpatrick, a co-founder of Water Street Healthcare Partners, this past weekend announced his candidacy for Illinois State Treasurer. He's running as a Democrat, and will face a serious primary challenger in Robin Kelly, a former state lawmaker and chief of staff to current Treasurer Alexi Giannoulias (who is running for the U.S. Senate seat being vacated by Roland Burris). In his announcement video, Kirkpatrick said: "In effect, the Treasurer is really the state's chief investment officer, and that's why I'm running... We need a Treasurer with a proven track record of smart, responsible investing." The issue of responsibility could be key for Kirkpatrick, who is leaving Water Street less than a year after the firm raised $650 million for a new fund. Some LPs have privately groused that he took the money and ran (literally), although Kirkpatrick was not listed as a "key man" on fund documents. It's unknown how Kirkpatrick's Water Street colleagues initially took the news, but they now seem to be strongly supporting his electoral ambitions. Fellow co-founders Jim Connelly and Tim Dugan have each contributed $25,000 to the campaign, while other staffers
2 min read · 11 August 2009
I spent some time on the phone yesterday with Domain Associates partner Nicole Vitullo, whose firm just closed its eighth fund with $500 million. After discussing why Domain lowered its target from an initial $700 million, we got to talking about the glut of VC-backed, late-stage pharma companies that are desperate for the public markets to accept them. Such companies and their investors traditionally have used IPOs as financial events rather than as liquidity events, which can help provide the final push through Phase III clinical trials and into FDA-approved commercialization. But it had been more than a year since any drugmaker had gone public, until Cumberland Pharma did so last night. As Vitullo said, the offering was one that healthcare VCs were keeping close tabs on. Some video thoughts on what that offering could mean to the bigger picture, after the jump:
1 min read · 11 August 2009
A few months back, we reported that Mohr Davidow Ventures was looking to raise some "annex" capital for its seventh fund. We also noted the irony of bulking up this particular fund, since it had originally closed in 2002 with $850 million, before slimming down to $450 million via a pair of fund size reductions. Today, we noticed a regulatory filing indicating that MDV seems to have closed the annex (or at least part of it), with $27 million in new capital. So the total is now up to around 57% of what MDV raised in the first place for Fund VII, whose active portfolio includes such companies as Nanosolar, PacketMotion and Proofpoint. What we also noticed was that MDV appears to have added annex capital to its two subsequent funds. One filings shows that MDV has raised $25 million for Fund VIII, a $400 million vehicle raised in 2005, and
1 min read · 10 August 2009
MMO game publisher Turbine has raised $50 million in new VC funding, according to a regulatory filing discovered by peHUB. The investment comes just one month before Turbine launches its first-ever hybrid product, a Dungeons & Dragons Online spinoff that will be free to play with various premium (read: pay) sections. Turbine did not list any new investors for the "Series D" round, of which just over $6.5 million has been called down. Return backers include Columbia Capital, Highland Capital Partners, Granite Global Ventures, Polaris Venture Partners and Tudor Ventures. The Westwood, Mass.-based company had previously raised around $95 million, including a $40 million Series C round last April. No valuations have been disclosed.
1 min read · 10 August 2009
