Doubts arise over the future of Yazam

Board members at Yazam are said to be discussing various options including downsizing the business to concentrate on portfolio-management.

The Wall Street Journal reports that Israeli investment company Yazam is under pressure from investors to wind down operations.

Yazam’s investors include Texas Pacific Group, the Carlyle Group, JP Morgan & Co, Merrill Lynch & Co and Apax Partners.

Concerns have arisen because of the recent downturn in the internet sector and the recent departures of the company’s chief executive and president, Yaacov Ben Yaacov. “Some investors who hold preferred shares in Yazam have informally asked the company to consider winding down the business,” the newspaper says.

Board members at Yazam are discussing various options including downsizing the business or partnering with other venture firms. Formal proposals on these moves have not been put forward.

Yazam acquired London-based First Tuesday, A European networking organisation in July last year. Changes at Yazam would have a direct impact on the networking organisation. However, the Guardian reports Shlomo Kalish, chairman of Yazam, saying: “Like all responsible companies in our area, given the turn of events in the financial markets, many options are being considered to reduce our burn rate. This includes taking a hard look at all our business units, but winding down First Tuesday is not an option.”

This comes at a time when others in the sector are more optimistic. Electra Investment Trust, which had been scheduled to wind-up operations, released positive third-quarter results last month. The company is now rumoured to be reconsidering its decision having returned £800m of capital to shareholders since March 1999.

When its results were released in May for the period ended March 31 2000, Electra said in a statement: “Looking further ahead, the Board is aware of the views that a number of shareholders have expressed in favour of providing some means of continuation or a rollover vehicle to enable those investors who wish to do so to maintain a holding in a successor vehicle. This is something that the Board will take careful account of in due course as the realisation of Electra's portfolio proceeds and as further value becomes available for distribution to shareholders.” Electra's assets are managed by Electra Partners which is now owned by its senior executives.