The sky is gray, the World Series is tied and Ive got a lot of big new project work to do before heading to Portland, Oregon for Venture Northwest (via Phoenix, ugh). In other words, its time for Monday Mouth-Off.
*** Thomas on the spinout of Shore Points Capital from BNP Paribas: These types of deals are happening more and more often, at least in Europe. Typically, a fund manager struggles to raise their next fund because existing LPs won’t reinvest so the GP strikes a deal whereby a secondary specialist comes in and (1) Makes a primary investment in the new fund and(2) Buys old LP stakes. It’s a bit more common on the VC side (vs. buyout) and other similar deals include: IDG Ventures Europe (secondary backer was Partners Group); Penta Capital (secondary backers: AXA, Bregal and Goldman Vintage Fund).
*** Michael on the PowerShares ETF: A conundrum: How to balance the for the masses approach to private equity with the big government requirements traditionally imposed by SEC regulations? Isnt accreditation really the issue? You say old boys club, but that is more a function of how the government established it way back when, as opposed to any clubby issues.Also, because large/public pensions are so heavily relied upon as LPs for the mega-funds, arent the working classes inherently part of the club already?If you are arguing for direct investment by the layman, then that is a completely different issue — and I would be surprised if you think that the average Joe off the street could pick a good investment team that would pick the winning investments.
Andy: The fundamental problem with these co-mingled security-like vehicles is just the fact that they are, by necessity, pre-funded.We all know that it typically takes an average of two years for fund managers to invest their commitments, and pre-funding an entire commitment into an intermediary vehicle causes either: (A) An IRR-drag from parking the commitments in cash prior to their investment in deals or (B) Taking equity exposure with the commitments and risking default if the capital is drawn during a market correction.
David: I very seldom take issue with anything you say; however, I must write to tell you I found the detail struck head-on by an SUV that had careened across a highway median to be unnecessary and sensational, under the circumstances. Agreed David.
*** Johnson: Dan, could you give us a hint as to what big new project is? Unfortunately I cannot but soon Johnson, soon.
Publishing Note : I will be in the air tomorrow morning, so my colleague Matthew Sheahan will be pinch-hitting. Please send the next 24 hours worth of press releases his way.
Data Note : VCs disbursed $6.36 billion into 611 deals in Q3 2006, according to VentureOne and Ernst & Young. MoneyTree Survey data from Thomson Financial, NVCA and PwC will be coming tomorrow.
In Memoriam : Jay Shiveley passed away last Thursday night from an apparent heart attack. Before joining OQO, Jay had been serving as CEO of portable PC company OQO, and before that was a partner with VC firms like VantagePoint Venture Partners, Sprout Group and Atlas Venture. He also spent time in operating positions with Oracle, Vitria and Forte. As one reader wrote over the weekend, Jay was one of the most highly respected sales VPs in the Valley.
A funeral service will be held today at 11am at the Trinity Episcopal Church, 330 Ravenswood Avenue in Menlo Park. A memorial reception will follow at the family home in Atherton.