Remade VC wreck soars to historic high(3)

A vehicle launched in 2000 as a public venture capital fund has now come back strong as a buyout-oriented business development company. The market cap of MVC Capital, run by a former KKR pro, is at an all-time high following the announcement of two huge exits.

A company once called MeVC is now trading at an all-time high under the management of a former buyout professional from Kohlberg Kravis Roberts.

MVC Capital today is trading above $19 per share – an historic high since its initial public offering in 2000. In mid-2002, the company’s shares traded near $7.

MVC Capital was originally formed as a publicly traded venture capital firm called MeVC. After debuting near $19 per share in 2000, the company’s stock price immediately took a tumble, along with most other technology offerings of the time.

In 2003, Michael Tokarz, who had recently retired after 17 years at KKR, took over the company and remade it as a provider of mezzanine debt and equity to small private companies. The renamed MVC was structured as a business development company based in Purchase, New York.

MVC has moved from strength to strength, and now sports a market capitalization of nearly $470 million.

MVC Capital recently announced two simultaneous exits from Latvian auto retailers, producing IRRs of well over 100 percent. The firm has agreed to sell Baltic Motors and SIA BM Auto to Inchcape PLC.

Baltic Motors was acquired in 2004 with a $6 million equity investment. The sale has produced a gain of $47 million, or a 105 percent IRR. BM Auto was acquired through an $8 million equity investment and has produced a gain of $23 million, or a 192 percent IRR.

The gains are equal to approximately 20 percent of MVC Capital’s current capital under management, Tokarz said in a statement.

Several major private equity firms, including KKR, Apollo Management and NRG Energy Capital Management, now have publicly traded affiliates on the US markets.