Asset diversification has become business as usual in private equity, as many top-tier firms have launched distressed funds, real estate funds, hedge funds, sub-debt funds and other things that don’t involve privacy or equity (let alone both). Venture capital firms, on the other hand, have mostly stuck to their knitting. Sure, you can argue the demerits of certain firms moving toward later-stage deals or raising country-specific funds, it most of it still falls within the conventional rubric of venture capital.
But venture giant Sequoia Capital may be the trailblazer who helps change all that. There have been rumors floating for several months that the firm was planning to launch some sort of hedge fund practice, and now some pieces of the puzzle are starting to come together. First, Sequoia has quietly hired Eric Upin, who most recently served as chief investment officer for the Stanford University endowment. Second, my colleague Alex Haislip reported that Sequoia has been trying to poach hedge talent since last November, and that it’s been talking about a $750 million target.
I spoke to a bunch of Sequoia limited partners yesterday, and only a few had heard about the Upin hire. Those with knowledge declined to get too specific, but indicated that Sequoia is planning something more innovative – and perhaps more comprehensive – than simply creating a hedge fund product (presumably focused on tech). It also seems that these plans also are still in the formative stages, and subject to change.
No word yet on who else Sequoia has hired for this mystery endeavor, except that I do know that Upin is not alone. Just for some brief background: Upin was a senior partner and managing director of equity research at Robertson Stephens between 1993 and 2002, after which he spent two years as director of tech research with Wells Fargo. He then joined Stanford Management Co. In February 2005 to oversee public equity investments, and one year later was named CIO when Mike McCaffrey left to hang his own shingle. He announced that November that he’d be leaving Stanford come February 2008, in order to pursue other opportunities.
More information as it becomes available. Upin did not return my calls, while Sequoia’s Mike Moritz declined comment.
*** The Desperate Internship Drive has begun over at the MBA Forum section of peHUB. So far I’ve entered in about half of the 60 submitted positions, and plan to get the rest up within the next few hours. So if you’re a first-year MBA candidate in search of a summer job, head on over to peHUB and start applying. But, I beg of you, please stop sending me your resumes. Unless you want to be a PE reporter, in which case I’ll be happy to take a look.
*** Reason #523 why I love my readers: Yesterday’s column briefly mentioned that I still needed to finish my taxes. Two “private client” pros at Big 5 accounting firms wrote in to offer their services. I declined, but was tickled by the proposal.
*** Jeff Bussgang gives his take on Fred Wilson’s Path to Liquidity post. It’s titled Built to Last vs. Built to Flip.
*** Henry Kravis antagonist Brave New Films has created Larry the Loophole, for your viewing pleasure (or displeasure, if you’re a typical Wire reader). It’s got the Schoolhouse Rock look, but absent the catchy tune. In other words, too much schoolhouse, too little rock. Watch it here.
*** A federal change to carried interest tax treatment has stalled, but some officials in New York City are considering a local approach.
*** peHUB First Read, including how Twitter may have saved a grad student from spending time in an Egyptian jail. Plus, a video argument against the government-backed subprime bailout.
Roche has acquired Piramed, a UK-based drug company focused on disease progression and resistance to chemotherapeutics in cancer cells. The deal included a $160 million up-front cash payment, and up to $15 million in clinical milestone payments. Piramed had raised over $17 million in VC funding since 2003 from Panorama Capital and Merlin Biosciences.
Green Maritime Partners has formed as a private equity firm focused on environmentally-sustainable investments within the maritime and clean energy sectors.Average investments will be between $5 million and $20 million. GMP was co-founded by shipping magnat Peter Georgiopoulos, with fellow co-founder Chris Teryazos running operations. Teryazos was previously with Pegasus Capital Advisors.
Morgan Stanley has added three bankers to its Dubai office, in order to expand its practice advising sovereign wealth and private equity funds in the Middle East and North Africa region. They are Dennis Cornell (formerly senior coverage banker Morgan Stanley’s financial sponsors group), Hugo Parson (formerly in Morgan Stanley’s leveraged & acquisition finance group) and Hani Ramadan (financial sponsors group at UBS).
SignalDemand, a San Francisco-based provider of on-demand price and margin optimization software, has raised $20 million in Series D funding. InterWest Partners led the round, and was joined by return backers Hummer Winblad Venture Partners, General Catalyst and Catamount Ventures. The company has now raised around $40.7 million since late 2004.
Rosum Corp., a Mountain View, Calif.-based developer of mobile positioning technology using broadcast television signals, has raised $15 million in Series B funding. TruePosition Inc., a subsidiary of Liberty Media, was joined on the round by return backers Charles River Ventures, Allegis Capital, Steamboat Ventures and KTB Ventures.
StarCite Inc., a Philadelphia-based provider of on-demand meeting and event management solutions, has raised $15 million in new VC funding. Return backers include Internet Capital Group, TPG Ventures and Norwest Venture Partners. The company had previously raised around $36 million.
Anaphore Inc., a San Diego-based protein therapeutics company, has raised $8 million in VC funding from 5AM Ventures and Versant Ventures. The company was formed via the acquisition of Danish biotech company Borean Pharma ApS.
Central Desktop, a Pasadena, Calif.-based provider of business collaboration platforms, has raised $7 million in first-round funding from OpenView Venture Partners.
WaveMaker Software (f.k.a. ActivGrid), a San Francisco-based developer of open-source visual tools for web development, has raised $4.5 million in new VC funding. Return backers Hummer Winblad Technology Partners and Worldview Technology Partners were joined by Sippl Investments.
Hyperion Power Generation Inc., a Santa Fe-based maker of a self-contained and transportable nuclear power reactor, has raised an undisclosed amount of funding from Altira Group.
Clear Channel Communications has extended the expiration date of the buyout-related tender offers for its senior notes to April 25. The offer for Clean Channel’s outstanding 7.65% senior notes due 2010 and a unit’s 8% senior notes due 2008 was priced last month. The original expiration date for the offers was Friday. Clear Channel has agreed to be acquired by Bain Capital and THL Capital, but is in the midst of litigation with the deal’s lenders.
Platinum Equity has completed its $417 million take-private buyout of Covad Communications Group Inc. The deal valued Covad stock at $1.02 per share. Covad is a San Jose, Calif.-based provider of integrated voice and data communications. It was advised on the deal by Barclays Capital, while Platinum was advised by Houlihan Lokey Howard & Zukin.
Sovereign Capital has sponsored a management buyout of World Class Learning Schools & Systems Ltd., a London-based operator of schools and education management services. No financial terms were disclosed.
WL Ross & Co. last week completed the first phase of its $1 billion investment in bond insurer Assured Guaranty Ltd. (NYSE: AGO). That piece involved the purchase of 10.7 million common shares at $23.47 per share, yielding $250 million in proceeds to the company. It gives Ross around a 12% ownership position.
The Blackstone Group has sold its 24.96% stake in German glass and plastic packaging maker Gerresheimer AG. The 7.8 million shares were sold at between €30.25 and €31 each. Gerresheimer went public in Frankfurt last June. www.blackstone.com
Firms & Funds
FTVentures has closed its third fund with $512 million in capital commitments. The bi-coastal firm will invest between $10 million and $60 million in software and services companies seeking to finance organic expansion, recapitalizations, build-ups and buyouts. FTVentures had raised $423 million for its second fund back in 2001.
Providence Equity Partners is raised the target of its “hung bridge” debt fund from $700 million to $1 billion, according to Dow Jones. A first close is expected within weeks. www.provequity.com.
Lionel Mestre and Roland Tricot have been named directors with Butler Capital Partners, a French private equity firm focused on distressed and special situations. Mestre has spent the past decade with PAI Partners, while Tricot had been with General Electric.
Stewart Kagan and Geoffrey Levin have joined law firm Cadwalader, Wickersham & Taft LLP as partners focused on private equity. Kagan was previously with Akin, Gump, Strauss, Hauer & Feld, while Levin was with Kirkland & Ellis.
Randy Parker has joined HarbourVest Partners as a principal focused on investments in real estate private equity funds and related opportunities. He previously was a managing director of Composition Capital Partners, a Dutch real estate fund-of-funds manager.