G&H Loses People, Postpones Fundraising

Three top professionals have left technology investor Garnett & Helfrich Capital and the San Mateo, Calif.-based firm has put plans on hold to raise a $750 million second fund.

In the space of two months, Vice President Betty Hung, Director Mark Barrenechea and Director Mike Guthrie have all left the firm. Founded in 2004, Garnett & Helfrich raised an inaugural $250 million fund that was later expanded to $350 million. Part of the the firm’s strategy has been to take controlling stakes in technology divisions of corporations that haven’t enough money or attention to thrive.

Guthrie left in December to join Palo Alto, Calif.-based Symphony Technology Group, a firm that is raising a $1 billion fund to invest in enterprise software and services. He previously co-founded TPG Ventures, and before that he was an investment banker with Credit Suisse First Boston. Guthrie did not respond to a request for comment.

In January, Hung, vice president of portfolio development, moved to Vista Equity Partners, while Barrenechea, whose new business address was unknown as of press time, also left. Emails sent to his personal account were not returned.

It is unclear whether Associates Neeraj Gunsagar and Grace Koo have stayed on; they are believed to be the only remaining investment professionals aside from its two name founders, Terry Garnett and David Helfrich. The firm has deleted the “Team” page from its Web site.

At the time of Guthrie’s departure, Garnett & Helfrich had been preparing to raise a $750 million-targeted second fund, and co-founder Garnett was planning a temporary move to London with his family, presumably to open an office there. At this point, any new fund-raising plans have been postponed. A spokeswoman declined comment but did say there is a “strong team” still in place.

At least one Garnett & Helfrich limited partner disagrees. “Each of these departures were for different reasons, but because they all happened in such a short period of time, it gives the impression of a crisis,” said the LP. He added that both Hung and Barrenechea only joined in mid-2006 and were not highly involved in many deals.

Sources close to the situation speculate that one factor in the shakeup may be the strong managerial and financial control held by the co-founders.

Among its investments, Garnett & Helfrich acquired mobile phone company Celunite, which has most of its operations in India, for $30 million last fall. The deal was the firm’s latest move in India, where it was planning to open an office this year. When Barrenechea joined the firm last summer it was after stints managing Indian operations for Computer Associates and Oracle Corp. Other Garnett & Helfrich portfolio companies with operations in India include Wyse Technology, which makes low cost, “thin” computers, and Ingres Corp., which is an open-source database company.—D.P.