Greetings from the Bay Area, where later today I’ll be moderating a pair of panels at a conference being hosted by TheFunded. Then it’s on a red-eye back to Boston (such self-flagellation is preemptive penance for taking a few days off next week, thus requiring Erin to awake super-early).
Running pretty late, but a few public pension notes to kick off our Thursday:
*** I have not yet met new NYC Comptroller John Liu, but he already seems to be a vast improvement over his predecessor (and not just because he quoted my obscenity in his official announcement of Larry Schloss as CIO).
The latest example is that Liu this morning announced that he would lift the ban on private equity placement agents, with the following conditions:
1. Placement agents must be registered with the SEC and/or FINRA
2. Placement agents must describe the services provided
3. Placement agents must demonstrate that they have helped raised at least $500 million from other entities (i.e., not NYC) in two of the past three years.
Moreover, those using placement agents now would be required to disclose their usage, including any associated fees. Fund managers seeking NYC business also would be required to disclose any contacts with Comptroller’s Office employees, and would be precluded from providing any gifts or campaign contributions to NYC pension officers.
Finally, these rules would be expanded to placement agents for funds in all asset classes, not just private equity.
This is a sensible, even-handed policy that does right by both pensioners and the private equity firms charged with their financial prosperity.
My only quibble is with the $500 million floor, because it would seem to prohibit any new placement agents from working with NYC (i.e., is too pro-i! ncumbent). Moreover, I would think that many smaller – and legit – age nts didn’t raise $500 million in 2009, given the macro fundraising troubles. But these are minor issues in the big picture, and kudos to the new Comp…
*** Some good and bad from CalPERS today. The good is that it released the list of eight PE/VC firms that did not comply with a voluntary request for information on past placement agent usage. They are: EnerTech Capital, Fenway Partners, GTCR, Information Technology Ventures, Markstone Capital, Pinnacle Ventures, Ripplewood and TSG Capital.
The bad is that it still will not release carrying values for its investments in the management companies of Apollo, Carlyle and Silver Lake. CalPERS is legally required to do so annually, which it accomplishes via the release of its Annual Investment Report (which is separate from its Comprehensive Financial Report).
A CalPERS attorney told me last fall that the Investment Report would be published by the end of January, but th! at date has now been pushed back to mid-March or early April. A pension spokesman blames the state furlough program, which shuts CalPERS down for three Fridays each month. Not sure if that excuse was given to me with a straight face (it was via email), since three extra days off per month should not result in a three-month reporting delay.
According to the current plan, CalPERS data on the aforementioned investments will be around 10-months old as of the time of release. Such irrelevance is unacceptable.
Top Three
Willcom Inc., Japan’s fourth-largest provider of mobile phone and wireless data services, has filed for bankruptcy with $2.3 billion in debt. The Carlyle Group owns a 60% stake in Willcom, but is expected to have its investment wiped out by the bankruptcy filing.
Clicker Media Inc., a Los Angeles-based creator of a programming guide for Internet television, has raised $11 million in Series B funding. Jafco Ventures led the round, and was joined by return backers Benchmark Capital and Redpoint Ventures.
The Public School Employees Retirement System of Pennsylvania (PSERS) announced that a 4.09% gain in investment performance for the fourth quarter of 2009, and 12.06% gain for the year. The system’s private markets performance for the quarter was 7% and -9.62% for the year.
VC Deals
Eleutian Technology LLC, a provider of online English education to students in Asia, has raised $10 million in growth equity funding from Cheyenne Capital Fund. Bob Grady of Cheyenne will take a board seat.
Effective Measure, an Australian developer of online audience measurement solutions, has raised US$4 million in Series A funding from Rho Ventures.
Dukky LLC, a New Orleans-based direct response company that uses social sharing technology, has raised an undisclosed amount of second-round funding led by LongVue Capital. It has raised a total of $3 million to date.
Buyouts Deals
E.ON has picked a consortium of 3i Group and Italian gas supplier Erogasmet as the favorites to buy its Italian gas grid, according to Reuters.
Hellman & Friedman and Silver Lake Partners reportedly are working on a joint bid for a majority stake in Interactive Data (IDC), which is being sold by Pearson PLC. Other possible suitors include Bain Capital, KKR and Permira.
Linsalat! a Capital Partners has acquired Eatem Corp., a Vineland, N.J.-based company that makes bases and concentrates used in soups and other food products. No financial terms were disclosed, except that GE Antares Capital provided a $37 million senior secured credit facility. peHUB first reported on the deal last month.
OpSec Security Group PLC (AIM:OSG) shareholders have approved Investcorp Technology Partners’ acquisition of a 29.8% ownership position. OpSec makes anti-counterfeiting protection technologies. The deal is worth a total of around £15.8 million.
PE-Backed IPOs
Medica, a French care homes operator backed by AXA Private Equity and BC Partners, said that an over-allotment option on its IPO pushed proceeds past $400 million.
PE-Backed M&A
Anthony, a Sylmar, Calif.-based maker of commercial glass refrigerator and freezer doors, has acquired Trausch Industries, an Audubon, Iowa-based provider of on-site refurbishment of refrigerator and freezer cases. No financial terms were disclosed. Anthony is a portfolio company of Aurora Capital Group, while Trausch owner Edgewater Funds will roll over some of its sale proceeds into a minority stake for the combined business.
PE Exits
Battery Ventures has agreed to sell Nova Analytics Corp., a Woburn, Mass.-based provider of lab and field equipment for electrochemical measurements, to ITT Corp. (NYSE: ITT). No financial terms were disclosed, except that Nova has annual revenue in excess of $160 million. Battery acquired Nova Analytics in 2003, and has since helped the company make nine acquisitions.
Firms & Fund
HgCapital Trust PLC (LSE: HGT) plans to raise between £30 million and £50 million next month, via an issuance of new shares. The firm has a current market cap of £210 million.
Human Resource
Michael Smith has stepped down as the University of Florida’s first chief investment officer, in order to join Global Endowment Management as a partner. He had originally come to Florida in 2004 from Duke Investment Management Co. (DUMAC), and helped to launch the University of Florida Investment Corp. (UFICO). Smith will focus of overall strategy and hedge funds at GEM, whose private equity practice is managed by fellow DUMAC alum Hugh Wrigley. Smith’s last day at UFICO is March 31. www.ufico.ufl.edu
BoA Merrill Lynch has named London-based Paul Donofrio as head of global corporate banking. He succeeds Cathy Bessant, who has taken a global tech and operations role.
Grotech Ventures has promoted Lawson DeVries to principal. He joined the firm in 2005 as a principal and was named a vice president three years later.
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