The investment managers at Intel Capital can expect changes in their take home pay, President Arvind Sodhani told PE Week.
He declined to go into details. But one of the changes Sodhani brought to Intel Capital since his appointment in March 2005 was to asses the group’s investment professionals based on their returns. Keeping tabs on who is doing well and who isn’t may make it easier for top performers to demand more compensation. “We are sensitive to that fact and we’re working on it,” Sodhani says.
The change in compensation comes at the end of a reorganization and a 15% to 20% staff reduction at Intel Capital. Sodhani says the reduction was not a “layoff” but rather part of a “redeployment program.” “Overall, there was a need for Intel to go through a structural efficiency effort,” he says. “We’ve done our part.”
Intel Capital had already streamlined its operations by eliminating the distinction between “strategic investors” and “treasury investment managers,” and retraining each group to conduct due diligence research and investment management. The changes made the group more closely resemble its venture capital counterparts and helped eliminate turf wars between investors in each group that thought they were capable of doing the other group’s job, Sodhani says.
Sodhani says the staff reduction is almost finished and that he is not looking to take on any new investors at this time.
Intel Capital isn’t having any trouble putting money to work, even with a reduced staff. The firm says it invested $249 million in 86 deals during the first half of the year. It has since announced several large funding deals, including a $600 million investment earlier this month in Clearwire, a Kirkland, Wash.-based WiMax infrastructure provider and a $40 million investment in Chinese IT outsourcing firm Neusoft, its largest China investment to date. —Alexander Haislip