The placement agent business can always be counted on to be in a state of constant change. The latest personnel disruptions emanate from Atlantic-Pacific Capital, a major, independent capital-raising business based in Greenwich, Connecticut.
Kevin Newman, who joined Atlantic-Pacific as its president and chief operating officer only a year ago, has left to form his own advisory firm. However, Newman will continue to work with Atlantic-Pacific as a senior advisor. The change has been amicable, a source said, noting that Newman maintains an office and an assistant at the firm's headquarters.
In a separate departure, another senior partner at Atlantic-Pacific, Dan Prendergast, who worked out of the firm's San Francisco office, has quit.
Newman's independent placement and marketing advisory business is called Kevin P. Newman Associates.
Newman joined Atlantic-Pacific in April 2003 after a long career as a marketing professional at Lehman Brothers, where he raised a total of more than $36 billion for private equity funds and structured products. At the time, Atlantic-Pacific's founder, chairman and chief executive officer, James Manley, said he was pleased to hire an experienced executive to oversee the operations and day-to-day activities of the firm.
Manley founded Atlantic-Pacific in 1995. The firm has become the largest player in a market once dominated by investment bank-affiliated firms like Merrill Lynch and Donaldson, Lufkin & Jenrette. Atlantic-Pacific has 22 professionals with additional offices in London, Chicago, Dallas, San Francisco and Hong Kong.
The year 2002 was a particularly successful one for Atlantic-Pacific, during which it raised two major funds – the $1.5 billion Resolute Fund (managed by The Jordan Company) and the $2.2 billion Matlin Patterson Global Opportunities Partnership, a distressed debt vehicle managed by a CSFB spin-out team. “Everybody was jealous of Atlantic-Pacific's 2002 performance,” says a placement agent at a competing firm. “They were getting all of these huge deals done and everybody else was just sucking.”
The separate source said Prendergast's departure is related to Manley's disproportionate claim to the firm's economics. This issue will strike observers of GP groups as familiar. In fact, Manley is planning for something also sought after by many founders of private equity firms – liquidity. The source said Manley has been in discussions with a number of institutions about the potential sale of the Atlantic- Pacific franchise.
Like fund-management firms, most of the value of a placement business resides in its people, who can suddenly walk out if they feel underappreciated, as evidenced last year when nine Merrill Lynch placement agents left en masse to join Lazard Freres' new capital-raising unit.
U2 SINGER JOINS NEW BUYOUT FIRM
Bono, the lead singer of Irish rock supergroup U2, will reportedly become a managing director at Silicon Valley “venture buyout” firm Elevation Partners, launched by former Silver Lake Partners cofounder Roger McNamee. The artist joins an all-star cast of partners at the Palo Alto, California-based firm, which will seek to raise $1 billion (€827 million) for a debut fund to invest in media and entertainment businesses. Other partners include John Riccitiello, the former president of video game company Electronic Arts; Fred Anderson, the former CFO of Apple Computers and Marc Bodnick, another Silver Lake director. Bret Pearlman, a senior managing director at The Blackstone Group, several weeks ago told partners there that he was leaving to join Elevation.
FAGNAN TO JOIN ATLAS AS PARTNER
Jeff Fagnan will join the Waltham, Massachusetts office of Atlas Venture in August as a partner in the communications team focusing on investments in systems, components and infrastructure. Fagnan was previously head of Seed Capital Partners' Boston office where he built businesses in the areas of connectivity infrastructure and networking convergence, including optical technologies, infrastructure appliances and software, semiconductors and new computing paradigms. In addition to his four years in venture capital, he has also had spells as a strategic consultant at Booz- Allen & Hamilton and in M&A and strategic planning at Nortel Networks.
WARBURG PINCUS GRABS MERRILL LYNCH MD
The global private equity firm has announced that Michael Profenius will join the firm as a managing director. Previously, he was managing director and global cohead of Merrill Lynch's Real Estate and Hospitality Investment Banking Group, and has 20 years' experience in real estate transactions. Profenius is currently based in Warburg's London office and will relocate to the New York headquarters this summer to lead the firm's real estate investment activities worldwide.
HIGHLAND CAPITAL PROMOTES TWO TO GP
The Lexington, Massachusetts-based early stage venture capital firm has announced that Jon Auerbach and Fergal Mullen have been promoted to general partners. Auerbach joined the firm in 2000 and focuses on the communications sector, specializing in wireless infrastructure opportunities. He previously worked as a business journalist covering the wireless industry for the Wall Street Journal and the Boston Globe. Mullen focuses on software and services companies in North America and Europe. Before coming to Highland, he served as founding partner of RSA Ventures, the corporate venture fund of IT security company RSA Security. Highland Capital, founded in 1988, is currently investing out of its $800 million sixth fund closed back in 2001. The firm has more than $1.8 billion in committed capital and invests in the communications, healthcare and information technology sectors.