peHUB Wire: Friday, February 13, 2009

Hey, who put the placement group in my fund-of-funds?

That would be Solution Capital Partners, a cleantech-focused fund-of-funds manager that has been formed in partnership with placement agent Far Hills Group. Specifically, Solution will be run day-to-day by Russell Diamond, who previously ran a smaller cleantech-focused fund-of-funds called R&D Capital Partners. Before that, he was a general partner with Saratoga Ventures. Solution’s investment committee, however, will include members of Far Hills Group – who also will provide due diligence assistance on potential investments, and help raise the actual capital. Furthermore, the two firms are sharing office space.

Geoffrey Bradshaw-Mack, a managing director with Far Hills Group, says that the joint venture was borne of individual Far Hills pros investing with Diamond’s prior fund. He adds that many LPs have indicated strong interest in cleantech – particularly given the pending stimulus bill – but that some are seeking a broadly-diversified strategy.

To that end, Solution is seeking to raise $200 million, with a $350 million cap. About a quarter of that would be allocated to early-stage VC, about half to growth-stage/late-stage and the remainder to “opportunistic” situations (including passive co-investments). It only expects to invest in pure-play cleantech funds, although would consider cleantech-specific sidecars of more sector-agnostic firms.

I did ask Diamond about the glaring lack of cleantech exits, and he replied that it was mostly just a matter of time. We’ll have to see if the LP community agrees.

*** Last December, The Carlyle Group shut down its Silicon Valley office and disbanded its West Coast venture and growth equity practice. Now some of the refugees are finding new homes. First up is David Lam, a former Carlyle vice president, has turned up as a partner with WI Harper Group. While with Carlyle, he served on the board of Actelis Networks, and as a board observer with Air2Web, eScreen, Ingenio and Panasas (where he once served as director of biz dev). We’re told to expect more of these announcements soon…

*** Regular readers know my praise for the Venture Capital Investment Competition (VCIC), in which teams of biz school students form faux VC partnerships and are judged on their due diligence, term sheet negotiation, decision-making and ability to present/defend their choices. In fact, I plan to again help judge the finals down in Chapel Hill this April.

The entire process, however, relies upon the participation of entrepreneurs. The “teams” listen to elevator pitches, conduct due diligence and negotiate with real companies in search of funding. Not only is this good for the teams, but can provide great experience for entrepreneurs. Imagine getting grilled by a dozen VC “firms” in a day, and then getting to hobnob with actual VCs later on (the judges). Plus, around 25% of presenting companies ultimately get funded.

Anyway, VCIC is now accepting applications to present at the VCIC regional events in Boulder, Santa Clara, Charlottesville, Chapel Hill, Philadelphia, New York, London, Boston and Los Angeles. Get more information here, and please pass this on to anyone you think may be interested.

*** Publishing Note: peHUB Wire will not publish this coming Monday, in observance of the President’s Day holiday (and due to the fact that I’ll be flying home from the West Coast). We’ll continue posting new content on the website, and will be back in your inbox on Tuesday.

Top Three

Portola Pharmaceuticals Inc. has signed a global licensing agreement with Novartis to develop and commercialize elinogrel, an anti-clotting agent for helping patients avoid heart attacks and strokes. Under terms of the agreement, Portola will receive a $75 million up-front cash payment, up to $500 million in potential milestone payments and additional royalties on future sales. Portola has raised around $220 million in VC funding.

KPS Capital Partners has won an auction to acquire the assets of tabletop and giftware company Lenox Group Inc., out of bankruptcy.

Suzanne Donohoe has joined Kohlberg Kravis Roberts & Co. as a managing director and global head of the firm’s client and partner group. She previously was head of Goldman Sachs Asset Management International.

VC Deals

Enpirion Inc., a Bridgewater, N.J.-based developer of power systems on a chip, has raised $16 million in Series E funding, according to a regulatory filing. QuestMark Partners is listed as an investor, alongside return backers Canaan Partners, Scale Venture Partners and RRE Ventures. The company also has raised past capital from Columbia Capital and SAS Investors. All together, Enpirion has raised nearly $70 million.

Yodle Inc., a New York-based provider of local online advertising and lead generation, has expanded its Series C round round from $10 million to $13 million, according to a regulatory filing. JAFCO Ventures led the round, and was joined by return backers Draper Fisher Jurvetson and Bessemer Venture Partners. The company had previously raised $15 million since 2006.

Jasper Design Automation, a Mountain View, Calif.-based EDA software company, has raised around $7 million in Series D preferred stock and convertible securities, according to a regulatory filing. Backers include Accel Partners, Foundation Capital, InnovationsKapital, Northzone Ventures and Zenshin Capital Management. The company previously raised around $20 million.

SonicMule Inc., a Menlo Park, Calif.–based developer of interactive sonic applications for the iPhone, has raised $3.9 million in second-round funding. Granite Ventures led the round, and was joined by return backers Bessemer Venture Partners, Maples Investments and company CEO Jeffrey Smith.

Dasient Inc., a San Jose, Calif.-based Internet security startup founded by former google exec Neil Daswani, has raised just over $2 million in seed funding, according to a regulatory filing. Backers include Maples Investments.

Autonomic Networks Inc., a Mountain View, Calif.-based provider of network security compliance solutions, has ceased operations after failing to secure additional funding, according to VentureWire. It now is expected to explore an asset sale. Autonomic Networks had raised around $70 million in VC funding since its 2001 formation as Vernier Networks, from firms like Allegis Capital, FT Ventures, DCM, Foundation Capital, Masthead Venture Partners, Weber Capital Management, UV Partners and Venrock. www.autonomic-networks.! com

Buyout Deals

Aleris International Inc., a maker of aluminum rolled products, has filed for Chapter 11 bankruptcy protection. It also announced that it had secured over $1 billion in DIP financing. Aleris is 100% owned by TPG Capital.

Platinum Equity is among the bidders for Hummer, the sport utility vehicle unit being sold off by General Motors.

Four Seasons Health Care cut its restructuring deadline after junior creditors threatened to take security over its assets. Four Seasons is a UK care-home operator owned by Qatari investment firm Three Delta.

TXCO Resources Inc. (Nasdaq: TXCO) said that it has retained Goldman Sachs to advise it on strategic options, which could include a merger or sale. The Texas-based oil and gas company currently has a market cap of approximately $64 million.

PE Exits

Esmertec AG (SIX: ESMN) has agreed to acquire Purple Labs SA, a Chambery, France-based provider of embedded Linux solutions for the wireless market. No financial terms were disclosed. Purple Labs had raised VC funding from Sofinnova Partners, Earlybird Venture Capital and Partners Group.

Informatica Corp. (Nasdaq: INFA) has agreed to acquire Applimation Inc., a Chicago -based provider of enterprise data management solutions for Oracle, PeopleSoft and Siebel environments. The deal is valued at approximately $40 million in cash. Applimation has raised around $9.3 million in VC funding from firms like Battery Ventures, JMI Equity, RPM Ventures and M Group.

Sergeant’s Pet Care Products Inc. has agreed to acquire Chomp Inc., a Weymouth, Mass.-based maker of all-natural dog and cat treats and supplements. No financial terms were disclosed. Chomp has raised a small amount of VC funding from CEI Ventures.

PE-Backed M&A

Petty Holdings, a portfolio company of Boston Ventures, has merged with Gillett Evernham Motorsports to form Richard Petty Motorsports. No financial terms were disclosed for the deal, which combines the Richard Petty #43 and #44 race team cars with with GEM’s team roster. The transaction does not include the Richard Petty Driving Experience, which Boston Ventures and Richard Petty will continue to own via a separate entity.

Firms & Funds

Paul Capital has met the $455 million target for its fourth private equity fund-of-funds.

Prairie Capital soon will begin raising between $275 million and $300 million for its fifth fund, according to LBO Wire. The Chicago-based firm also plans to secure up to another $75 million through a credit facility.

Human Resources

Henry Silverman has joined Apollo Management as chief operating officer, according to the Wall Street Journal. Silverman is the onetime head of Blackstone Group, who most recently ran Cendant Corp.

Kevin Wang has left NPEA Capital, an Asia-focused private equity group owned by French bank Natixis. Wang founded NPEA Capital back in 1999, and served as its lead partner.

Edison Venture Fund has promoted Chris Sugden to managing partner. He joined the firm in 2002, and currently chairs its investment committee.

Roger Hoit has joined Moelis & Co., as a managing director. He previously was a managing directors in Morgan Stanley’s global financial sponsors group.

Morgan Stanley has fired Garth Peterson, the head of its China real estate investment group, for suspected violations of the U.S. Foreign Corrupt Practices Act. The firm also has put its global head of real estate investing on administrative leave.