In late 2005, three ex-Shansby executives formed VMG Equity Partners, a new firm targeting “highly branded consumer products”. They planned to leverage their experience at The Shansby Group, now TSG Consumer Products, which currently holds in its portfolio such companies as Smashbox Cosmetics and Smart Balance Foods. But the young firm also brought a unique strategy to the table in the form of the fourth founding partner, David Baram.
For seven years Baram worked as president and chief operating officer of The Firm, the Los Angeles talent management agency that represents Cameron Diaz, Snoop Dogg and Justin Timberlake, among other celebrities. Baram is still an officer and director of The Firm, and VMG's marketing materials promote this as a “strategic partnership”.
“This unique relationship provides access to key influencers and trendsetters in order to promote the firm's portfolio of brands in a manner and at a cost not generally available to lower middle market consumer products companies,” VMG said in a recent press release.
The Los Angeles- and San Francisco-based firm just closed its debut fund on $325 million (€244 million) last month. To date, VMG has made only one investment: it partnered with Washington DC-based Capital Logic Partners in 2005 to acquire a majority ownership stake in Timbuk2, a San Francisco-based manufacturer urban-lifestyle bags and accessories, some of which may soon be conspicuously displayed on the persons of The Firm's clients.
Baram's entry into private equity marks the latest chapter in a diverse career. Before working for The Firm, Baram was an attorney specialising in entertainment law, and was formerly a legal consultant for magician David Copperfield. Baram himself was a practicing magician, and a member of the Magic Castle, a Los Angeles venue and clubhouse for members of the Academy of Magical Arts. While at the Firm, he hosted a TV series called “Mastermind” that featured his client, magician Criss Angel.
VMG's LPs are undoubtedly waiting for Baram to pull Snoop Dogg out of a hat.
HELLMAN & FRIEDMAN TAPS INTUIT EXEC
Hellman & Friedman have announced the hire of Brad Henske, formerly the general manager of Intuit's Consumer Tax Group, to managing director. The firm said in a statement that Henske will use his background in consulting, line management, and financial management to work closely with its portfolio companies. The hire makes Hellman & Friedman the latest in a series of private equity firms, including Denver-based KRG Capital Partners and UK-based Dunedin Capital Partners, to hire partners with operations backgrounds. The firm has raised and managed over $16 billion, and is currently investing its sixth fund, with $8 billion in committed capital.
BLACKSTONE HIRES MERRILL LYNCH PROPERTY PRO
The Blackstone Group has hired Michael Nash as a senior managing director in the firm's real estate group. Nash has spent the last ten years at Merrill Lynch, where he led the firm's real estate principle investment group in the Americas, and worked with high yield debt opportunities. At Blackstone, Nash will be responsible for developing new business initiatives within real estate. Given his background, this might include real estate debt strategies. Last year, Merrill was a key financing source for several of Blackstone's large REIT privatisations, including the acquisitions of Trizec and Meristar.
KRG DOUBLES PARTNER ROSTER
Denver-based KRG Equity Partners has announced the addition of five new managing partners this week, doubling its stable of managing directors. Christopher Bock and Steven Neumann were promoted from within, while Blair Tikker, Ted Nark, and Stewart Fisher were new hires. The new hires all come from KRG portfolio companies. Tikker was most recently the chief executive office of HMS Healthcare. Nark was formerly the chief executive officer and chairman of the board of White Cap Construction Supply. Fisher comes from Accellent, where he was chief financial officer. A source in KRG said the new partners will be an asset as the firm prepares to raise its next fund.
ELEVATION TO INSTALL IPOD HEAD AT PALM
Elevation Partners, the Menlo Park, California-based private equity firm focused on technology and media investments, has agreed to invest $325 million (€243 million) in a recapitalisation of Palm, a Nasdaqtraded provider of mobile computing technologies. Elevation partners Roger McNamee and Fred Anderson, the former chief financial officer of Apple, will join the company's board. In addition, Jon Rubinstein, the former head of Apple's iPod division, will join the company as executive chairman of the board. Two directors of Palm will resign. The deal is the biggest to date for Elevation Partners, which raised a $1.9 billion debut fund in 2006.
KKR BRINGS TWO ON BOARD
Kohlberg Kravis Roberts has announced two new hires. Heinz-Joachim Neubürger, formerly the chief financial officer of Siemens AG, will join KKR as both a senior advisor and a managing partner. Richard Clemmer was most recently the chief executive officer of Agere Systems, a Lucent spin-out and semiconductor producer. Neubürger will use his international experience to grow KKR's business in Asia and Europe, while Clemmer will work to improve the development and operations of the high-tech companies in KKR's portfolio.
GENERAL ATLANTIC EXPAND WEST COAST OPERATIONS
Greenwich, Connecticut-based private equity firm General Atlantic is continuing its West Coast expansion with the relocation of managing director Marc McMorris to the firm's Palo Alto, California office. Morris has been based on the West Coast before, as the vice president of Goldman Sachs' high technology group, before joining General Atlantic. McMorris's relocation follows last year's appointment of tech industry veteran Ray Bingham as a managing director for the same office. General Atlantic opened its California office in 2001.
BLACKSTONE ANNOUNCES THREE NEW BOARD MEMBERS
In a recent pre-IPO filing, Blackstone has revealed that it intends to hire three new executives to the board of its general partner entity, Blackstone Group Management LLC. They are: the former prime minister of Canada, Brian Mulroney, the former chief executive officer of consulting firm Deloitte Touch, William Parrett, and Lord Nathaniel Charles Jacob Rothschild, a member of the prominent Rothschild family and the founder RIT Capital Partners, a listed investment house. At press time, Blackstone was in the midst of preparing for an IPO.