peHUB Wire: Monday, March 23, 2009

Don’t you just love it when a plan comes together? Ok, Tim Geithner might not be Hannibal Smith (infallable, cigar-chomping, able to convincingly read a script), but there is still something very satisfying about finally knowing how the government hopes to bribe PE firms into the toxic asset class.

We’ve posted the fact sheet here, and will provide plenty of analysis later in the day. The real question now is whether or not Geithner can pull the $25 billion or so he needs from the private sector, without providing some sort of guarantee that said participants won’t be hit with retroactive/punative taxes. Given that his proposals don’t appear to require legislation, such a provision would seem impossible to add…

*** NY Kickback Scandal: Check out the following from the SEC civil suit:

“Loglisci benefited financially from the sceheme by obtaining funding for a low budget film, titled Chooch, that Loglisci and his brothers produced. In or about February and March of 2004, Morris and the principal of a private equity firm seeking to do business with the Retirement Fund each separately invested $100,000 to help market and distribute Chooch.”

Pete Lattman of the WSJ identifies that PE firm principal as David Leuschen, a co-founder and senior managing director of Riverstone LLC. Yes, the same Riverstone LLC that allegedly received tainted NY Common commitments for two funds raised in partnership with The Carlyle Group.

As I said Friday, there are more shoes to drop here. By the way, Erin’s posted Chooch’s video trailer for your bemusement.

*** Last week, we reported that Michael Beckwith had left Sequoia Capital, which he had joined last year to launch a public equity investment practice.

Now, VentureBeat is reporting that Eric Upin has left Sequoia Capital, just one year after joining to launch an investment management platform for college and university endowments. Ironically, the Sequoia effort was conceived as a smaller-scale version of Makena Capital, which is where Upin is now headed. Moreover, Makena was founded by former Stanford University CIO Mike McCaffrey, who was succeeded in the Stanford job by… Eric Upin.

Also worth noting that it was Upin’s presentation to other Sequoia partners that precipitated the VC firm’s infamous Graveyard Presentation for portfolio companies.

*** GameTime: Two rounds of NCAA tourney play down, as we’ve got a new leader: John Olsen, a Chicago-based investment banker who most recently was with Banc of America Securities. John’s got 57 points right now, and a Final Four of Louisville, Memphis, Villanova and UNC (UNC beating LOU in the final).

Top Three

Bain Capital, Hellman & Friedman and TPG Capital each have shown an interest in acquiring iShares, an exchange-traded funds provider owned by Barclays.

Industry Ventures, a San Francisco-based secondaries firm, has closed its fifth fund with $265 million in capital commitments.

Merck Serono, a division of Merck KGaA, has formed a corporate venture capital group that will invest in biotech startups. Named Merck Serono Ventures, the effort is initially capitalized with €40 million. Areas of particular interest include neurodegenerative diseases, oncology, autoimmune diseases and inflammatory diseases.

VC Deals

Sencera, a Charlotte, N.C.-based maker of thin-film photovoltaic modules, has raised $15.6 million in funding led by Quercus Trust.

StrikeIron, a Cary, N.C.-based provider of live data and business functionality over the Web, has raised $5.5 million in Series D funding. No investor information was disclosed, but the company previously raised around $9.3 million from firms like Ascent Venture Partners, The Aurora Funds and NC IDEA.

Hammerhead Systems Inc., a Mountain View, Calif.-based data communications equipment vendor, ended operations last Thursday. The company had raised around $100 million in VC funding since its 2002 inception, from firms like Foundation Capital, Mayfield Fund, Enterprise Partners Venture Capital, Pequot Ventures, Silver Creek Ventures and Apex Venture Partners. Light Reading first reported the shutdown.

Buyout Deals

CI Capital Partners plans to acquire a majority of Ply Gem Industries Inc.’s 9% senior subordinated notes. No financial terms were disclosed. CI is an existing shareholder in Ply Gem, a Cary, N.C.-based maker of products for use in the residential new construction, do-it-yourself and professional renovation markets.

Sportsman’s Warehouse, a Utah-based sporting goods retailer, has filed for Chapter 11 bankruptcy protection. Seidler Equity Partners owns a 25% stake in the company.

PE Exits

SmartReply Inc., an Irvine, Calif.-based email and telephone marketing company, has agreed to acquire mSnap Inc., a San Francisco-based provider of interactive mobile advertising solutions. No financial terms were disclosed, except that mSnap shareholders will receive a minority stake in SmartReply. mSnap had raised around $6 million from First Round Capital and Partech International.

Firms & Funds

5AM Ventures has held a $119.25 million close on its third fund, according to a regulatory filing. The Menlo Park, Calif.-based firm focuses on life sciences opportunities, and is believed to be targeting at least $150 million – which was the size of its second fund.

Human Resources

Charles Teague has left General Catalyst Partners, where he had been a technologist-in-residence, according to Scott Kirsner’s Innovation Economy blog. No word yet on his future plans, except that it seems to be iPhone-related.