Private Equity
Last year, self-made Israeli billionaire and media mogul Haim Saban quietly entered the business of venture capital, adding an early-stage digital media practice to his seven-year-old, Los Angeles-based investment company, Saban Capital Group. Today, I caught up with the head of that practice, native New Zealander Craig Cooper, who’s also been a venture partner at VantagePoint Venture Partners and a founding partner with Softbank Capital. Cooper also co-founded Boost Mobile, a teen-focused wireless startup that sold to NexTel in 2003 for an undisclosed amount. Among other things, we talked about what it’s been like working for Haim, whose net worth has reportedly dropped by a third in the last year, what Cooper makes of friend and former colleague Eric Hippeau becoming CEO of Huffington Post, and how the economy has impacted what a year ago was a vibrant venture scene in sunny Southern California. (Hint: it’s gotten bushwhacked.)
6 min read · 23 June 2009
We’re in the midst of compiling our 2010-2011 PE/VC Partnership Terms & Conditions Study, and we’d like your participation. In exchange, we’ll send you a complimentary copy of the study when it is published. All you need to do is fill out a confidential survey on your latest fund’s terms and conditions, by going here. The deadline is June 30, so please act fast. For a signed promise of confidentiality, please email our research editor Eamon Beltran.
1 min read · 23 June 2009
Private equity firms have a penchant for naming themselves after rocks, trees or... themselves. But a 1970s jazz-rock band? Pretty sure that's a new one. The firm is Blood, Sweat & Capital LLC, a Texas shop focused on the healthcare services space. "We met with a lot of healthcare executives when we were setting things up, and one of them mentioned that we should run a name contest through the Internet," says Pat Abele, a BS&T partner who has served as CEO for both New West Health Service and the Catholic Health Care Network. "There were probably a thousand different names submitted, and Blood Sweat & Capital really resonated with us. Maybe it's because of our ages, or maybe it's because we're putting lots and lots of sweat in along with our money."
2 min read · 22 June 2009
ABS Capital Partners, a Baltimore-based growth equity firm, has closed its sixth fund with $420 million in capital commitments. The fund has already made four investments. Limited partners include the Pennsylvania State Employees Retirement System, Partners Healthcare, Abbott Capital and WP Global Partners.
3 min read · 22 June 2009
Did you know that the National Association of Realtors has a venture capital arm called Second Century Ventures? Me neither, until I met managing director Constance Freeman (formerly of Cue Ball) at the Chicago Shindig on Monday night. Apparently the 1.2 million member organization first dabbled in VC by making one-off investments in companies like Move Inc. (online real estate), SentriLock (a realtor lockbox) and ZipLogix (real estate forms software). It then formed Second Century Ventures in 2007, and made an investment in commercial listings platform ePropertyData.
1 min read · 18 June 2009
1 min read · 18 June 2009
President Obama today will propose an overhaul of the financial regulatory system, and the WaPo has obtained an 85-page white paper that lays out the specifics. The net result will be three new federal bureaucracies (four created, one erased). More important to peHUB readers is the following paragraph: All advisers to hedge funds (and other private pools of capital, including private equity funds and venture capital funds) whose assets under management exceed some modest threshold should be required to register with the SEC under the Investment Advisers Act. All advisers should be required to report information on the funds they manage that is sufficient to address whether any fund poses a threat to financial stability. This certainly seems more aimed at hedgies than at PE and VC funds, but Obama also wants to defend against firms skirting the rules by just altering their self-described classification. In other words, a hedge fund can't suddenly call itself a VC fund, in order to avoid regulation. A byproduct is that there are unlikely to be different "modest threshold" of assets under management between the sub-sectors, which probably means most VC funds will actually be left out of the mix (assuming the threshold is in excess of one billion dollars).
2 min read · 17 June 2009
Culled from regulatory filings, here are some recent private equity and venture fundraising updates, not reported elsewhere. Walton Street Real Estate Partners VI-FF LP has raised $22 million. Walton Street is based in Chicago. Richardson Capital Private Equity LP, a buyout firm based in Manitoba, Canada, has raised $277.35 toward its goal of $693 million. The fund has compiled commitments from 44 investors since launching fundraising in 2006. Dynamis Venture Partners LP has raised $9 million from 33 investors. Dynamis is based in Charlottesville, Va. Resource Capital Funds, a private equity firm based in Denver, Colo., and Perth Austrailia, seeks to raise $800 million for its fifth fund. The firm, which began marketing this fund in 2009, makes investments in mining companies and projects across a diversified range of commodities and geographic regions., according to its website.
1 min read · 15 June 2009
The California Public Employees' Retirement System (CalPERS) yesterday made headlines for proposing an increase to its private equity allocation from 10% to 14 percent. A vote is scheduled for the pension fund’s board meeting next week. At first glance, the move seems to be a giant vote of confidence in private equity (venture, buyouts, etc.). But that gets tempered when one realizes that CalPERS is already at 13% exposure to the asset class, which makes the proposal look more like reactionary CYA prompted by the denominator effect. So which is it? According to sources close to the pension fund, it’s both. The allocation increase’s immediate affect would be to address the current exposure realities, but there also is a desire to “juice returns during the upcoming recovery.”
1 min read · 10 June 2009
Connie last night posted a Q&A with economist/pundit Paul Kedrosky, who has released a paper arguing that the VC industry must shrink in line with the decreasing capital requirements of the startups they fund. Much of the blame for the buildup, Paul says, goes to limited partners – who have agitated for access to top-tier firms (or at least ones that used to be top-tier), and who jumped at the opportunity to invest when the firms' fund-sizes grew. Paul is certainly correct in his historical assessment – just look at Kleiner’s rapid growth – but I’m not so sure that LPs are going to help the VC industry rightsize/downsize. After all, for every new LP dollar committed to VC funds over the past few years, there have been a dozen LP dollars committed to buyout funds.
1 min read · 10 June 2009
