Private Equity
CMEA Ventures has quietly changed its name to CMEA Capital. Jim Watson, a CMEA managing director, says the move was made to better reflect the firm’s plan to broaden its investment strategy. It will continue doing early stage deals, but also plans growth-stage and other sorts of funds in specific sectors. For example, CMEA is currently raising a Green Growth fund, and soon could do similar things in spaces such as IT or healthcare. CMEA historically has invested around 75% of its capital into early-stage deals, with the remainder going to growth or late-stage opportunities. "It's all about how you attract the best talent," Watson says. "You could do one big fund, or look for people to come in and fund a more specialized fund. We debated both sides of it
1 min read · 03 February 2009
Updated with comments from Ropes & Gray below. A bill was introduced in the Senate last week that would require hedge funds to register with the SEC. On closer look, we realize it applies to more than just hedge funds, as pointed out by our friends at Ropes and Gray. If passed, the bill also would regulate and require disclosure from all PE and VC funds with $50 million or more in assets. Of course, Schoolhouse Rock has taught us that a bill is just a bill (and not a law). This proposal, introduced by Senators Carl Levin (D – Michigan) and Chuck Grassley (R – Iowa), could go through a lot of changes before it actually gets passed. But as is, it's bad news for those of us who like our private equity private.* It means that buyout funds will have to disclose the names and addresses of all of their investors and the value of the assets in each of their funds. Likewise, the registration would require
3 min read · 02 February 2009
2 min read · 29 January 2009
VC firms have added lots of job titles over the years, including venture partners, special limited partners and entrepreneurs-in-residence. But quant analysts? That’s one of the positions at Correlation Ventures, a San Diego-based firm that currently is raising its debut fund. Details are sketchy at this point – it’s not talking, natch – but it kind of sounds like a venture index effort. In other words, Correlation has developed an algorithm that would be used to passively invest in venture deals being led by other firms (it’s already “signed” some brand-name partners).
1 min read · 27 January 2009
The New York State Common Retirement Fund has selected Parish Capital and Bank of America to help it expand its emerging manager private equity portfolio, which targets funds with less than $750 million in assets under management. The system has allocated $350 million to Parish, with $250 million allocated to co-investments and the remaining $100 million allocated to fund investments. The system has allocated $200 million to Bank of America, all of which is to be used for fund investments. To date, the system’s emerging manager program has invested approximately $400 million.
2 min read · 26 January 2009
1 min read · 23 January 2009
Last month, I moderated a panel discussion about reinventing the venture capital model. I’ll be doing the same next Friday in New York. In both cases, the underlying thesis was that the venture capital model is broken at worst, and dysfunctional at best. It’s a thesis with which I won’t argue, given that median fund returns since 2002 are underwater. When most LPs would have been better served by putting their money in the mattress, it’s clear that something must be done. Unfortunately, almost all of the discussion to date has been around the edges. Very reminiscent of the 2002-2003 “back to basics” era, which focused on things like reduced fund sizes, more conservative valuations and fewer investments into saturated spaces. Those were necessary steps, but in many cases slowed the bleeding rather than stemmed it. What we may need is something far more radical. The trouble with radical proposals is that they’re tough to come by. Luckily, a Boston-area VC has come up with one such suggestion, which I lay out below. For reasons that should become obvious, he asked not to be identified. There are obviously a lot of moving parts here – both pragmatic and philosophical – and I’ve already gotten feedback from some prominent LPs and GPs. I hope you’ll also contribute either via email or comments. And if you have a different concept for reinventing venture capital, please be sure to pass it on:
4 min read · 23 January 2009
Prime Technology Ventures has hit the €150 million target for its third fund, and says it is headed toward an undisclosed hard cap. The European venture firm also named two new partners: Jelto Kromwijk Smits, former CEO of Philips Incubator, and Joost Holleman, formerly with AlpInvest Partners.
2 min read · 23 January 2009
Washington Mutual has agreed to sell its LP interests in three VC funds managed by FT Ventures, according to a filing with the U.S. Bankruptcy Court in Delaware. Industry Ventures will buy the positions for $3.46 million, plus the assumption of $6.9 million in unfunded commitments. This one is a bit interesting, if only because it’s unusual for us outsiders to have visibility into a secondary sale’s pricing. WaMu reports that it had already funded $13.1 million, which means the deal has a discount in excess of 70 percent. Of course, WaMu is a particularly motivated seller, and still has some inventory to move. You can download WaMu's filing and sale agreement after the jump.
1 min read · 22 January 2009
Forty-three U.S.-based venture capital funds raised $3.4 billion in Q4 2008, according to data released this morning by Thomson Reuters and the NVCA. That’s a massive drop from both the previous quarter ($8.4b) and the same quarter in 2007 ($11.7b). It also means that 2008 venture fund-raising came in at just $28 billion, which is down 21.4% from the 2007 totals. Download the full release.
1 min read · 19 January 2009
