Private Equity
A group of around two dozen placement agents have formed a lobbying group, to address state and federal efforts to ban their usage by PE/VC firms trying to raise capital from from public pension systems. The group has retained MultiState Associates to do the regulatory glad-handing, and is being spearheaded by C.P. Eaton Partners and Atlantic-Pacific Capital. I spent some time on the phone this morning with C.P. Eaton founder Charlie Eaton, to learn more about the group's objectives and structure. What follows is an edited transcript: Is this group supposed to be around for the long haul, or is it more a short-term creation to deal with immediate issues at the state and federal level? Eaton: We haven’t thought beyond the current issues. I think we assume we might have to work on this all year, and if we can address and get a favorable outcome in New York, then perhaps it would create a precedent that would be used in states like Illinois and New Mexico, which both have bans in certain jurisdictions. We always knew the SEC would get involved, so that would be part of the program as well. We may not need to keep this coalition together after that, although we could obviously continue discussions and commiserate more informally.
4 min read · 29 July 2009
It’s been nearly a week since SEC chair Mary Shapiro issued her statement about a federal ban on PE/VC firms using placement agents to raise fund capital from public pensions. What remains elusive, however, is the actual proposal. As such, the private equity market still doesn't have answers to such questions as: (a) Would public universities be included? (b) Would firms be grandfathered in if they began fundraising before the rules were put in place? (c) Would all public pensions be required to standardize reporting of intermediaries? (d) Would there be a capital floor, or is it “one size fits all?” (e) Is the SEC out of its frickin’ mind? An agency spokesman yesterday told me that there is no specific timetable for when the rules will be released, but told me to keep my eyes on this section of the SEC website. In other words, the proposal could be there within the next hour, or within the next month. Probably closer
1 min read · 28 July 2009
Matrix Partners today announced that it has closed two new funds, totaling $600 million. This includes a $450 million ninth VC fund, and a $150 million "special opportunities" fund. peHUB reported on both earlier this week.
2 min read · 24 July 2009
New AOL chief executive Tim Armstrong just finished speaking here at the Fortune Brainstorm Tech conference, and gave a bit more color on the reinvigorated "AOL Ventures" initiative. Sounds like AOL Ventures will basically be a bifurcated program. On the one hand, it will be used like a traditional corporate VC arm, investing in companies that AOL believes could be of eventual strategic value. Or, as Armstrong puts it: "AOL Ventures is not as much a strategy as a membrane around the company to bring in innovation." Of greater interest, AOL Ventures also will be where the company puts past strategic acquisitions that have not yet worked out. Kind of a way station of sorts, with companies given a P&L and then left to chase their
1 min read · 23 July 2009
Is Mary Shapiro jealous of all the pub that Andrew Cuomo has been getting? The SEC today proposed new rules that would prohibit private equity funds (broadly speaking) from using placement agents, when trying to secure capital from public pension systems. This is basically the federalization of what's been doing in New York, and is equally misguided (albeit well-intentioned). This is basically the federalization of what’s been going on in New York, and is equally misguided (albeit well-intentioned). “Placement agents” didn’t cause the pay-for-play scandal in New York. Corrupt public pension officials did. All the scummy fixers in the world can’t make a dent in an honest retirement system. That’s why it’s pay-for-play, rather than just pay.
2 min read · 23 July 2009
2 min read · 22 July 2009
Venerable venture capital firm Matrix Partners is in the midst of raising two new funds, according to regulatory filings. The larger pool of capital would be for Matrix Partners IX, which is targeting the same $450 million that was raised for Matrix Partners VIII back in 2006 (technically $445m, but you get the point). Typical VC fund, and an LP source tells me that the final close is all but a formality at this point. The other fund is a bit more mysterious. It's called Matrix Partners Special Opportunities Fund, and is targeting $150 million.
2 min read · 21 July 2009
Yeesh. The California Public Employees' Retirement System (CalPERS) has had one rough year. According to newly-released information, assets under management at the nation's largest public pension dropped a breathtaking 23.4% between June 30, 2008 and June 30, 2009 -- its steepest-ever year-over-year decline. Moreover, its private equity portfolio lost 31.4% of its value, with a value of $23 billion through March 31 (PE performance is a laggard). In a statement, CalPERS' new(ish) chief investment officer Joe Dear called the results unsurprising. "It is about what we expected given the collapse of markets across the globe,” he said. “The good news is we have the opportunity to capture future returns because of our long-term investment horizon. The System has
2 min read · 21 July 2009
1 min read · 14 July 2009
U.S.-based venture capital funds raised just $1.7 billion in the second quarter of 2009, according to data released this morning by Thomson Reuters (publisher of peHUB) and the National Venture Capital Association. The results are in line with earlier reports, and represent the lowest quarterly total in more than six years. Just 25 funds raised capital last quarter, which is the smallest number since Q3 1996. The largest Q2 success story was Domain Associates, a healthcare-focused VC shop that secured $371.1 million for its eighth fund. Get data charts after the jump...
1 min read · 13 July 2009
