SIGULER OPPORTUNITY

Kevin Kester has long been big on small, and that enthusiasm and expertise has now found a home at Siguler Guff, the boutique New York private investment firm.

Kester joined the firm last month as a principal with responsibility for the firm's specialised funds of funds programme. In particular, Kester will focus on the small end of the buyout market, where he says the opportunities for outsized return are better. “A huge percentage of these GPs don't even pop up on anyone's radar screens”, he says. “Institutions have the skill sets and sophistication to understand these opportunities, but they don't have the resources”.

Kester knows well the limited resources of the institutional investor, having served as director of alternative investments for Colorado's $24 billion (€19 billion) Public Employees' Retirement Association until late last year, when he quit to join Colorado family investment office The Broe Companies.

At Colorado PERA, Kester created an innovative investment programme aimed at smaller buyout funds, having previously watched with frustration quality buyout funds get turned away simply because they were too small. Kester hired Texas advisory firm Alignment Capital to vet funds for the programme, over which Colorado had final discretion.

Over the past two years, Kester maintained a dialogue with Siguler Guff founder George Siguler. The two see eye-to-eye on the opportunities found in the less efficient small buyout market. Siguler knows a thing or two about private equity opportunities, having been a co-founder of Harvard University's private equity programme in the 1970s.

Kester says Siguler Guff is considering raising a dedicated small-buyout fund of funds at some point in the future.

Kester's new job will relocate him to Boston, putting him a short flight away from his brother, James Kester, a New York-based managing director of Allianz Private Equity Partners. Between the two of them, there won't be many buyout funds on the planet that a Kester won't see.

TOM HICKS TO STEP DOWN EARLY
The co-founder of Dallas buyout firm Hicks Muse Tate & Furst said at an annual investor conference that he will step down as chairman of the firm on December 31. In August, the firm announced that Hicks would retire from the firm but retain his chairmanship until the end of March 2005. Speaking to limited partners at the firm's annual investors meeting in Dallas, Hicks reiterated a succession plan described to LPs earlier this year that will see cofounder John Muse take over as chairman of the firm. Muse remains head of the firm's London office. Hicks also announced he would step down from the board of Clear Channel, a publicly traded radio and entertainment company in which Hicks Muse has an investment. In 2002, Hicks Muse co-founder Charles Tate retired from the firm.

DUNLEAVY JOINS LAZARD PLACEMENT TEAM
New York-based financial services provider Lazard has appointed Patrick Dunleavy to its Private Fund Advisory Group, where he becomes a managing director. Dunleavy was previously at Citigroup, where he was managing director and co-head of the Private Equity Funds group. Dunleavy joined Citigroup in 2001, and was appointed co-head of the placement team in January 2004 along with Doug Blagdon. This followed the departure of the head of the division, Loren Boston, who in May resurfaced as managing director and head of private equity origination at the placement arm of Merrill Lynch. Prior to his stint at Citigroup, Dunleavy was a managing director at Deutsche Bank's fundraising group and head of the private placement group at Cowen & Co. He began his career as a lawyer in the M&A and securities group at Willkie Farr & Gallagher.

REYES LEAVES VENTURE ECONOMICS
Venture Economic's longtime research head Jesse Reyes has quit his post at the company, a division of Thomson Financial. Venture Economics, a New York division of financial information giant Thomson Financial, is a major supplier of performance data to the private equity industry. Reyes was the chief architect, promoter and analyst of that data, and a frequent commentator at conferences and in print. Reyes was particularly active in pursuing the creation of benchmarks for private equity. Reyes most recently was the “primary visionary” behind the release of Venture Economics online data product, VentureXpert. Joining Reyes in stepping down from Venture Economics is Anthony Romanello, director of investor services, who joined the company in 1999.

MORGENTHALER HIRES FORMER GE EXECS
The Cleveland, Ohio-based middle market firm has announced the hire of Al Stanley and Daniel Farrar in its buyouts division. Both Stanley and Farrar join Morgenthaler after having served as high-ranking executives at General Electric. Stanley most recently served as president and chief executive officer of GE's Global Life and Health Reinsurance division, and served president and CEO of GE's Mexico operations prior to that. He worked for GE for eight years. Farrar most recently served as president and CEO of GE Fleet Services for all of Europe. He was with GE for 16 years.

LIGHTYEAR PROMOTES GLENN, HIRES MCKINSEY EXEC
New York-based private equity firm Lightyear Capital has promoted David Glenn to managing director and hired Gun Keresteci as a senior vice president from McKinsey & Co. Glenn, who was previously a senior vice president with the firm, joined Lightyear from Greenhill & Co. in Sept. 2001. Keresteci was a partner in the McKinsey's financial institutions practice leadership group before coming aboard. Lightyear Capital is a $2 billion private equity firm focusing principally on direct investment in financial services. The firm was founded in 2001 by Donald Marron, the former chairman and chief executive officer of Paine Webber Group.

OVP HIRES FORMER INTEL EXEC AS PARTNER
Seattle-based venture capital firm OVP Venture Partners has appointed John Hull as partner. Hull comes from Intel Capital, where he was the director of the Intel Communications Fund – a $500 million (€394 million) fund that invests in networking and communications companies. At Intel, Hull and his team directed $150 million to companies in the Wi-Fi space. Hull will be based in OVP's Portland, Oregon office and will focus on networking and mobility companies. He will also work on the firm's Asian strategy. Hull is currently an adjunct professor of venture finance at the Pamplin School of Business at the University of Portland. This is the second new partner at OVP this year following the promotion of Lucinda Stewart in February to partner from principal. OVP Venture Partners has more than $500 million in capital under management.

MONTAGU NEWHALL GETS LIM AS PARTNER
Venture fund-of-funds firm Montagu Newhall Associates has announced the addition of Jim Lim as partner. Lim was most recently a director of venture capital at Commonfund Capital, a fund-of-funds firm that manages almost $5.5 billion (€4.3 billion) in capital. Commonfund manages capital solely for non-profit institutions, including college and university endowments, foundations and hospitals. Lim was also the pension fund manager for pharmaceutical giant Pfizer for the three years prior to his work with Commonfund. Pfizer's pension plan was valued at more than $2 billion during Lim's tenure. Montagu Newhall also recently opened a new office in Silicon Valley headed up by founding general partner Rupert Montagu. Ashton Newhall and Montagu founded the firm in 2001. The fund has additional offices in Owings Mills, Maryland and London. The fund focuses on information technology, telecommunications and life sciences.

PIPER JAFFRAY'S VENTURE ARM TO SPIN OFF
Piper Jaffray, the independent brokerage and investment bank based in Minneapolis, Minnesota, is preparing to part company with Piper Jaffray Ventures, its $225 million (€177 million) venture capital affiliate specialising in early-stage healthcare and life science companies. The group is to re-brand as Sightline Partners after completing a management buyout led by its senior executives. The deal is expected to close by the end of the year. Managing partner Buzz Benson will lead the transaction, supported by managing directors Ken Higgins, Maureen Harder and Heath Lukatch. The bank's decision to spin off the venture business was driven by “increasing concerns in the [banking] industry around the appearance of a conflict of interest [between private equity and other financial services activities], and the prevailing view on Wall Street that private equity earnings are of lower quality”. Piper Jaffray Ventures was established in 1992; in the first half of 2004, the business contributed $7.6 million to its parent's earnings of $417 million during the period.