Firm in Playboy bid requested mandate changes

Rizvi Traverse Management, the Detroit firm partnering with Hugh Hefner to take Playboy private, has attempted to change its investment mandate at least twice over the years.

Rizvi Traverse Management, the low-profile Detroit firm teaming up with Hugh Hefner for the proposed take-private of Playboy, has requested changes to its investment mandate at least twice over the years, according to investor documents.

The firm asked an LP to approve the expansion of the scope of its film-investment fund to allow investment in “any of the entertainment fields”, according to April 2010 minutes of the Wayne County Employee’s Retirement System. The public pension has a $20 million commitment with Rizvi Traverse.

It is not clear if Rizvi Traverse asked to expand its investment scope specifically for the Playboy deal. The firm manages two funds – Rizvi Opportunistic Equity Fund, which raised $250 million in 2004, and the Newbridge Film Capital fund.

A spokesperson for Rizvi Traverse said the firm's partners would not comment. A source told PEO the firm is currently fundraising.

In May, a Rizvi executive, John Giampetroni, was back to ask the pension to “expand the mandate” of Newbridge Film Capital again to “include entertainment lending”. A decision on the expansion request was pushed off by the board to the June meeting. It is not clear if the request was granted in June, and pension officials did not return phone calls for information. The June meeting minutes have not yet been posted on the web site.

In 2006, a Rizvi Traverse executive appeared before the Wayne County board to ask that half of the pension’s original $20 million commitment to Rizvi Opportunistic Equity be reallocated to the newly created Newbridge Film Capital fund. The board approved the change.  

Rizvi Traverse splashed into the headlines this week as the firm partnering with Hugh Hefner in his bid to assume total control of struggling Playboy Enterprises. Hefner, who owns 69.5 percent of the company’s Class A shares, and 27.7 percent of the Class B shares, wants to buy out the Class A and B shares at $5.50 per share.

Rizvi Traverse has assured Hefner that it has been in touch with “major lenders” and the firm is “highly confident ample financial resources will be available to complete the transaction”.

The firm was founded by Suhail Rizvi and John Giampetroni. Their biographies on the firm’s website include only their titles and where they attended school. The firm has an elevated profile in Hollywood because of its reported recent investment in Summit Entertainment, which produces the “Twilight” vampire movies, and an investment in talent agency ICM.

Available Rizvi biographies link him with a variety of institutions through board seats. A biography on the website of a company called Digital Lifestyles Group says Rizvi “began his career in 1986 with the MIG Companies, an investment management firm with over $2 billion under management”. Other biographies link him to AG Holdings and Rizvi Interests.

Wayne County's commitment to Rizvi Traverse is the second largest in its relatively limited private partnership portfolio, which also includes commitments to CDO Investors II, Citigroup Capital Partners, Everest Energy, Mesirow Capital Partners and Peak Partners, according to its 2007 annual report.

The pension's does not make more recent annual reports available.