GOING WITH THE GRAIN

David Tanner has helped launch yet another private equity business, this time within agribusiness company Continental Grain.

David Tanner has helped launch yet another private equity business, this time within agribusiness company Continental Grain.

One of the co-founders of New York alternative asset manager Quadrangle Group, and also a former Lazard Capital Partners and Warburg Pincus executive, Tanner left Quadrangle in 2006 to become a vice president at ContiInvestments, the investment arm of Continental Grain.

Now he's helped launch a structured alternative investment platform within the company, called Arlon Group.

Arlon is comprised of three units: private equity direct investment arm Arlon Capital, hedge fund Arlon Opportunities Investor; and fund of funds manager Arlon Asset Management. Arlon Group will manage investment activities unrelated to Continental Grain's legacy agri-business operations.

Tanner, a member of Arlon's three-person investment committee, stresses that “the big advantage the direct investment business brings to the table is investing from a permanent base of capital”. He declined to disclose total assets under management.

“When we meet with management, we don't always have to talk about how we are going to exit, which makes for a much more partner-like relationship with them,” says Tanner.

Arlon Capital seeks to make investments of $5 million to $100 million in companies ranging from expansion stage to buyout, but will not make venture capital investments. It will target industries including consumer products, financial services, food and agribusiness, and media and communications.

The unit will target investments in North America, Europe and China. It plans to leverage Continental Grain's experience in China, where the company has maintained a presence since 1979.

The direct investment unit may raise outside capital in the future. However, Tanner says it will only raise capital from “like-minded investors, so that the unit can maintain its competitive edge”.

Along with Tanner, Arlon's investments are overseen by Continental Grain chairman and chief executive Paul Fribourg and chief financial officer Michael Zimmerman. Tanner acts as advisor and consultant to senior investment professionals Ben Fishman and Tatiana Goldstein, who will manage Arlon Capital's operations.

Continental Grain was established as a grain trading firm in 1813 in Arlon, Belgium.

HARVARD ENDOWMENT MANAGER LEAVES FOR UNC
Harvard Management Company (HMC), charged with supervising the largest university endowment in the world, has lost private equity manager Kevin Tunick to the University of North Carolina-Chapel Hill. Tunick's exit is the third high-level HMC departure within the last six months. Former HMC chief Mohamed El-Erian left the endowment in September to rejoin bond giant Pacific Investment Management Company and former real estate investment manager David Ferrero left his post in early December. As of last year, HMC managed over $33 billion (€21.5 billion) in assets, of which nearly $3 billion was allocated to private equity. Forty-three percent of Harvard's endowment, which earned a 23 percent return for fiscal year 2007, is tied up in alternative asset investments.

FIRST RESERVE PROMOTES CFO
Connecticut-based First Reserve Corporation has promoted its chief financial officer, Jennifer Zarrilli, to managing director. Zarrilli's promotion brings the number of managing directors at the energy-focussed firm to 12. Zarrilli joined the firm in 1998 after spending six years at private equity firm Quadrant Management as a financial executive. Over the last 10 years, Zarrilli has built the back office accounting team from “two or three” to 10 people. In her new role, she will focus more on “integrating the back office into the office in general”. First Reserve's most recent fund, First Reserve Fund XI, closed on nearly $8 billion in 2006, and the firm is now raising its 12th fund, targeting $12 billion.

VC FIRM HIRES HARVARD PROFESSOR
US venture firm Highland Capital Partners has hired Harvard Law School Professor and internet researcher John Palfrey as a venture executive. Palfrey will look at investment opportunities within his areas of expertise and aid in the development of Highland portfolio companies. Palfrey is the executive director of Harvard Law's Berkman Center for Internet and Society. His research spans internet law, intellectual property, the internet's impact on democracy and how young people use new technologies. Palfrey has co-founded several technology companies and was a founder of RSS Investors, a syndication technologies-focussed private equity firm launched in 2005. Highland's 14-person IT and digital media team has 33 current investments. The firm has $3 billion in committed capital under management.

BC PARTNERS EXPANDS NEW YORK OFFICE
European buyout firm BC Partners has recruited James Rubin and Daniel Selmonosky from JP Morgan-backed One Equity Partners as senior partners in its New York office. Senior partners Raymond Svider and Justin Bateman are also relocating from the firm's London office to New York in the second quarter of this year. The expansion of the New York office, which was set up in 1991, will transition it from being largely a base for the investor relations team to the firm's first deal team outside Europe. BC Partners continues to invest its €6 billion ($9.2 billion) European fund, which was raised in 2005, Svider said. Capital for the firm's US investments will come from this fund.

SARKOZY JOINS CARLYLE
US investment firm The Carlyle Group has appointed Olivier Sarkozy, the half-brother of the French president, as co-head and managing director of its recently formed Global Financial Services Group. He takes the position of Ned Kelly, who left Carlyle to become president of Citi Alternative Investments in January. Sarkozy is based in New York and will continue to work with UBS in an advisory capacity. Sarkozy was previously joint global head of FIG Investment Banking at Swiss bank UBS. Prior to joining UBS in 2002, Sarkozy had worked at US investment bank First Boston Corporation since 1993 where he was managing director and head of the depository institutions group.

RIVERSIDE REWARDS TEAM
US mid-market private equity firm The Riverside Company has promoted three investment professionals to partner: Anne Hayes, Kristen Newhall and Volker Schmidt. Hayes and Newhall are located in New York and work with the Riverside Capital Appreciation Fund, whereas Schmidt is based in Munich as part of the Riverside Europe Fund team. Hayes and Newhall joined Riverside as associates in 2001 and 2000 respectively. The firm focuses on the smaller end of mid-market investments in the US, Europe and Asia and has nearly $2 billion under management across nine funds.

VESTAR PROMOTES TWO
New York-based private equity firm Vestar Capital Partners has promoted Peter Calamari to principal and Brendan Spillane to corporate chief financial officer and executive vice president. Calamari, now a consumer group principal in the Denver, Colorado office, has been with Vestar Capital since 1999. Prior to joining Vestar, Calamari worked in mergers and acquisitions at Merrill Lynch investment banking. Spillane is based in Vestar's New York office. He joined Vestar in 2006 from Schroder Ventures affiliate SV Investment Partners where he was CFO. Vestar has $7 billion (€4.7 billion) in assets under management for investments in the US, Europe and Asia. Its fund V closed in 2005 on $3.65 billion.

QUADRANGLE NAMES CIO OF NEW QAM UNIT
Private investment firm Quadrangle Group has hired former Gordon and Betty Moore Foundation chief investment officer Alice Ruth as a managing principal and chief investment officer of newly launched Quadrangle Asset Management (QAM). In her previous position, Ruth oversaw a $6 billion (€3.9 billion) investment portfolio and team of investment professionals. She was also involved in the launch of the Foundation in 2000, which is geared towards advancing environment conservation, science and the San Francisco Bay area. Quadrangle cofounder Steven Rattner cited Ruth's management experience and track record launching new investment strategies as key reasons for her hire in a statement. The New York-headquartered firm launched its investment management business in January. QAM handles asset allocation, manager selection, plan implementation and risk management for “founding investors” including longtime Rattner friend and billionaire New York may or Michael Bloomberg.