July / August 2008 Issue


    Month: July
    Year: 2008

    Back to Print Editions

    PEO 2.0:<br/>THE BOGEYMAN COMETH

    Private equity has to embrace transparency. Ignorance is a dangerous breeding ground, as PEO editor Nicholas Lockley finds.

    THOMAS DORR<br/> MANAGING DIRECTOR,<br/> ALTERNATIVE INVESTMENT PARTNERS<br/> MORGAN STANLEY

    Starting out as a management consultant at Bain & Company, Thomas Dorr went on to spend 14 years at Weyerhaeuser, the Washington State-based pulp and paper company. Having originally intended to be a general manager at the firm, Dorr was invited to join the company's innovative pension arm. According to Dorr, the pension was delivering ?dramatic outperformance? with its pure alternative assets allocation, including hedge funds, private equity and opportunistic real estate. The Weyerhaeuser team moved to Morgan Stanley in 2000 with Dorr becoming CIO for the private equity fund of funds team. With his senior team, he has since been focusing on building a private equity fund of funds operation with a global mandate investing half of its capital inside North America and half outside in small to mid cap buyouts, venture capital and special situations. Since Dorr joined, his team has raised the Morgan Stanley Private Market Fund (PMF) I ($309 million, 2000); PMF II ($500 million, 2004); PMF III ($1 billion, 2006); and the Global Distressed Opportunities Fund ($500 million, 2006).

    ALGAE POWER

    ARCH Venture-backed Sapphire Energy claims it can make top quality, renewable and eco-friendly crude oil from algae. How long until green gold is delivered to market? By Matt Levin.

    MAGHREB ON THE MOVE

    A fund targeting family businesses in Tunisia, Morocco and Algeria has closed ahead of target thanks in part to the region's improving exit prospects.

    PERFORMANCE

    What can be learned from past performance about the future prospects for private equity? Introducing the Peracs PE Barometer, Oliver Gottschalg of HEC School of Management and Robert Ryan from Peracs Due Diligence Services assess the attractiveness of today's environment for private equity.

    GOING PUBLIC AGAIN

    Having listed on the London Stock Exchange in May, Kuwait's Global Investment House has now opted to raise a new fund there as well.

    LYING LOW

    Ashmore Investment Management is well known to management teams in Asia – but most people may have little or no grasp of its activities. That's the way it likes it.

    VIEWS OF GERMANY

    We asked a selection of leading players in the German market for their views on threats and opportunities in Europe's largest economy. Here's what they said:

    CREATIVE STRATEGY

    Art meets private equity in a new fund being raised by Robert Tomei's Advanced Capital.

    LOCUST REVISITED

    The dreaded insect has flown back into the German private equity debate - this time with a smiling face.

    COUNTRY REPORT: GERMANY

    Private equity firms operating in Germany have reasons to be optimistic: the economy has held up well so far despite global pressures, while the asset class appears to be successfully challenging negative stereotypes. Nonetheless, things could yet take a turn for the worse. Andy Thomson reports from Frankfurt.

    BUOYANT DRIFTERS

    Investor support for private equity fund managers continues to rise, in spite of concerns that some are not sticking to the agreed script.

    REAPING WHAT OTHERS DIDN'T SOW

    Two decades of severe underinvestment have left global energy markets struggling to meet rising demand – and private equity firms with a massive opportunity.

    INVESTOR RELATIONS

    Adverse changes in the debt markets and a deepening economic downturn have had tangible effects on deal flow and transaction structures for certain segments of the private equity market. But how concerned are investors? Amanda Janis examines if there's any hand-wringing or handholding taking place and learns how concerns are being addressed and reassurances conveyed.

    STORY OF EXODUS

    The run on Bear Stearns and its $2.2bn fire sale to JPMorgan Chase has sent a steady stream of the investment bank's former executives to alternative asset managers.

    PRIVATELY SPEAKING

    Established in 1972, and responsible for private equity's first-ever fund of funds, Adams Street Partners is not the kind of organisation to flee in fright when a market downturn looms over the horizon. Andy Thomson and Philip Borel met with Bon French and Hanneke Smits in London to find out more about the firm's history, its take on current conditions and its broad-mindedness when it comes to manager selection.

    FLYING HIGH

    TPG-controlled XOJET has secured nearly $2.5bn in debt and equity as it goes head-to-head with Warren Buffet-backed NetJets.

    ASSET CLASS

    The Canada Pension Plan Investment Board moves very large sums of money in and out of private equity. Direct investment is a key component of its strategy finds Philip Borel.

    NO ROOM IN THE STABLE

    Citi Alternative Investments continues to reshuffle its private equity unit with the closure of William Comfort-led Citi Venture Capital.

    AWARDS

    At PEI's Global Winners Celebration in June, Sir Ronald Cohen collected the inaugural Private Equity Leader Award in recognition of his achievements in private equity and social investment.

    PUT IT IN THE BANK

    Why your next meeting with a GP may begin with, ‘So we're forming a bank holding company’.

    PROFITABLE SOCIAL CHANGE

    Suzanne Weinstock reports on the evolution of the venture philanthropy model in the US.

    BUDDING ARTISTS WANTED

    BUDDING ARTISTS WANTED 2008-08-01 Staff Writer Do you have latent artistic talent to unleash? Or does a member of your family? If so, you may be interested to hear that London-based gatekeeper Altius Associates is organising a follow-up to the successful art exhibition it oversaw in 2005. Back then, private

    VC HAMMER

    Reinvented entrepreneur MC Hammer put on a show at Intel Capital's annual CEO Summit.

    Editor's letter

    Editor's letter 2008-08-01 Staff Writer Looking back 12 months to the July/August 2007 issue of Private Equity International (where did the time go?), it doesn't take a genius to work out that the main preoccupation of private equity at that time was its image. Our pages recorded

    ALGAE POWER

    ARCH Venture-backed Sapphire Energy claims it can make top quality, renewable and eco-friendly crude oil from algae. How long until green gold is delivered to market? By Matt Levin.

    PEO 2.0:<br/>THE BOGEYMAN COMETH

    Private equity has to embrace transparency. Ignorance is a dangerous breeding ground, as PEO editor Nicholas Lockley finds.

    THOMAS DORR<br/> MANAGING DIRECTOR,<br/> ALTERNATIVE INVESTMENT PARTNERS<br/> MORGAN STANLEY

    Starting out as a management consultant at Bain & Company, Thomas Dorr went on to spend 14 years at Weyerhaeuser, the Washington State-based pulp and paper company. Having originally intended to be a general manager at the firm, Dorr was invited to join the company's innovative pension arm. According to Dorr, the pension was delivering ?dramatic outperformance? with its pure alternative assets allocation, including hedge funds, private equity and opportunistic real estate. The Weyerhaeuser team moved to Morgan Stanley in 2000 with Dorr becoming CIO for the private equity fund of funds team. With his senior team, he has since been focusing on building a private equity fund of funds operation with a global mandate investing half of its capital inside North America and half outside in small to mid cap buyouts, venture capital and special situations. Since Dorr joined, his team has raised the Morgan Stanley Private Market Fund (PMF) I ($309 million, 2000); PMF II ($500 million, 2004); PMF III ($1 billion, 2006); and the Global Distressed Opportunities Fund ($500 million, 2006).

    MAGHREB ON THE MOVE

    A fund targeting family businesses in Tunisia, Morocco and Algeria has closed ahead of target thanks in part to the region's improving exit prospects.

    GOING PUBLIC AGAIN

    Having listed on the London Stock Exchange in May, Kuwait's Global Investment House has now opted to raise a new fund there as well.

    LYING LOW

    Ashmore Investment Management is well known to management teams in Asia – but most people may have little or no grasp of its activities. That's the way it likes it.

    CREATIVE STRATEGY

    Art meets private equity in a new fund being raised by Robert Tomei's Advanced Capital.

    PERFORMANCE

    What can be learned from past performance about the future prospects for private equity? Introducing the Peracs PE Barometer, Oliver Gottschalg of HEC School of Management and Robert Ryan from Peracs Due Diligence Services assess the attractiveness of today's environment for private equity.

    LOCUST REVISITED

    The dreaded insect has flown back into the German private equity debate - this time with a smiling face.

    BUOYANT DRIFTERS

    Investor support for private equity fund managers continues to rise, in spite of concerns that some are not sticking to the agreed script.

    VIEWS OF GERMANY

    We asked a selection of leading players in the German market for their views on threats and opportunities in Europe's largest economy. Here's what they said:

    REAPING WHAT OTHERS DIDN'T SOW

    Two decades of severe underinvestment have left global energy markets struggling to meet rising demand – and private equity firms with a massive opportunity.

    COUNTRY REPORT: GERMANY

    Private equity firms operating in Germany have reasons to be optimistic: the economy has held up well so far despite global pressures, while the asset class appears to be successfully challenging negative stereotypes. Nonetheless, things could yet take a turn for the worse. Andy Thomson reports from Frankfurt.

    STORY OF EXODUS

    The run on Bear Stearns and its $2.2bn fire sale to JPMorgan Chase has sent a steady stream of the investment bank's former executives to alternative asset managers.

    INVESTOR RELATIONS(2)

    Many general partners' recent letters to investors have sought to reassure that, despite market turbulence, current portfolios remain healthy overall and investment capabilities credible. Several firms' founders have also offered perspectives on general economic conditions. Private Equity International here provides excerpts of five “Dear LP” letters issued during the first quarter.

    FLYING HIGH

    TPG-controlled XOJET has secured nearly $2.5bn in debt and equity as it goes head-to-head with Warren Buffet-backed NetJets.

    INVESTOR RELATIONS

    Adverse changes in the debt markets and a deepening economic downturn have had tangible effects on deal flow and transaction structures for certain segments of the private equity market. But how concerned are investors? Amanda Janis examines if there's any hand-wringing or handholding taking place and learns how concerns are being addressed and reassurances conveyed.

    NO ROOM IN THE STABLE

    Citi Alternative Investments continues to reshuffle its private equity unit with the closure of William Comfort-led Citi Venture Capital.

    PRIVATELY SPEAKING

    Established in 1972, and responsible for private equity's first-ever fund of funds, Adams Street Partners is not the kind of organisation to flee in fright when a market downturn looms over the horizon. Andy Thomson and Philip Borel met with Bon French and Hanneke Smits in London to find out more about the firm's history, its take on current conditions and its broad-mindedness when it comes to manager selection.

    PUT IT IN THE BANK

    Why your next meeting with a GP may begin with, ‘So we're forming a bank holding company’.

    ASSET CLASS

    The Canada Pension Plan Investment Board moves very large sums of money in and out of private equity. Direct investment is a key component of its strategy finds Philip Borel.

    BUDDING ARTISTS WANTED

    BUDDING ARTISTS WANTED 2008-08-01 Staff Writer Do you have latent artistic talent to unleash? Or does a member of your family? If so, you may be interested to hear that London-based gatekeeper Altius Associates is organising a follow-up to the successful art exhibition it oversaw in 2005. Back then, private

    AWARDS

    At PEI's Global Winners Celebration in June, Sir Ronald Cohen collected the inaugural Private Equity Leader Award in recognition of his achievements in private equity and social investment.

    VC HAMMER

    Reinvented entrepreneur MC Hammer put on a show at Intel Capital's annual CEO Summit.

    PROFITABLE SOCIAL CHANGE

    Suzanne Weinstock reports on the evolution of the venture philanthropy model in the US.

    Editor's letter

    Editor's letter Staff 2008-08-01 Writer Looking back 12 months to the July/August 2007 issue of Private Equity International (where did the time go?), it doesn't take a genius to work out that the main preoccupation of private equity at that time was its image. Our