The sky is gray, the Magic is imploding and I’m just 48 hours away from boarding a flight to Peru. In other words, it’s time for some Thursday Throwback.
First up are a couple of emails on my suggestion that younger PE pros should blog in order to help “build their brand.”
ThePrivateEquiteer, an anonymous PE blogger, writes: “Most firms I know wouldn’t tolerate a team member blogging about the business, their deals or even just general private equity. Anecdotal evidence of this is that most private equity bloggers are anonymous… For example, if I made a negative comment about secondary buyouts, it could literally affect future secondary deals. I think this privacy exists because PE has more to hide than VC. PE is more about deal-making and financial engineering, neither of which is particularly conducive to openness. VC firms have the luxury of selection and benefit from being known around town.
Chris: “We are typically competing against ever PE fund out there. Why give information to your competition? This is different that VC deals where you are trying to build a syndicate and the prestige of the participating firms influences members to join in. If a junior staff member has time to blog, they apparently don’t have enough work to do (I-banking mentality).”
*** Next up are some responses to last Friday’s column, about how placement agents are way down on the list of public pension problems. A public pension manager writes: “I applauded your list of five things that are more screwed up than the placement agents…. However, I have one more to add, that imitation is a substitute for reason. The overarching problem in the public plan space is the fact that there is a disincentive to innovate. Simply do what others are doing and we won’t have any problems.”
Thomas: “I found your comments on the NY pension scandal ‘In other words, placement agents can serve a worthy purpose, but we’re banning all of them because of a few rotten apples. Kind of like selling your car to avoid fender benders,’ to be off the mark. What the financial industry does not seem to get is that the rest of the country/world see only an ingrained culture of corruption, focused on how to game the system for maximum personal advantage. It is not clear to the casual observer that there are any ‘non rotten apples’ are working in the financial services industry.”
Anon: “I can’t believe for all your coverage on placement agent problems you haven’t once mentioned the pension’s board of directors. Think about who really has the power.” I should have been more specific Anon – I meant to lump most board members in with “politicians.”
Carrie: “Has the NYC Comptroller’s press office answered your question yet about how many people work on its private equity team, or when it will begin hiring (as Thompson promised on CNBC)?” Of course not, but I’ll call again today…
*** Finally, we have Srujan on the eCast lawsuit: “When approached for comment concerning the $18M fraud, Danny Glover replied: “I’m too old for this sh**.”
*** Shameless Promotion: Buyouts later this month is hosting a Webinar on what PE firms can do when they’re running low of funds to support existing portfolio companies.
Top Three
Citigroup Infrastructure Investors has been eliminated from the auction for London’s Gatwick airport, according to Gatwick owner BAA.
Cempra Pharmaceuticals Inc., a Chapel Hill, N.C.-based developer of anti-infectives, has raised $46 million in Series C funding. Quaker BioVentures led the round, and was joined by Devon Park Bioventures and return backers Aisling Capital, Intersouth Partners, Teachers’ Private Capital and investment banker I. Wistar Morris III. The company previously raised around $32 million.
The Oklahoma Teachers Retirement System has terminated its relationship with Aldus Equity Partners, which had been selected last June as a discretionary private equity manager. www.ok.gov/TRS
VC Deals
Anulex Technologies Inc., a Minnetonka, Minn.-based maker of medical devices for spinal disk preservation and anular repair, has raised $10.2 million in fourth-round funding, according to a regulatory filing. It had previously raised around $34 million, from firms like Delphi Ventures, New Enterprise Associates, St. Paul Venture Capital, Affinity Capital Management, MB Venture Partners and SightLine Partners. It also secured a $7 million “growth capital term loan” from Silicon Valley Bank. www.anulex.com
Streamazzo SA, a Paris-based provider of rich application software platforms for mobile, has raised €4 million in new VC funding. Innovacom led the round, and was joined by return backers Sofinnova Partners, Sofinnova Ventures, Qualcomm, NTEC and GET Valorisation.
Orasi Medical Inc., an Edina, Minn.-based maker of diagnostic tests for the efficacy of compounds that treat neurological diseases, has raised $3.5 million in Series B funding. Return backers include CentreStone Ventures and PrairieGold Venture Partners.
Aha Mobile Inc., a Palo Alto, Calif.-based maker of a mobile app that provides information to drivers, has raised $3 million in VC funding from Venrock.
Ksplice, a developer of technology to install software updates while applications are running, has won $100,000 in startup capital, as part of the MIT $100K Entrepreneurship Competition. The company was formed by a group of MIT engineering grads.
Buyout Deals
BUMA, an Indonesian mining services company, has put itself on the auction block. Bank of America is managing the process, and is reaching out to Asian private equity firms.
Commerzbank AG next week is expected to send out a PPM for its Kleinwort Benson unit, which has received management buyout interest from more than 20 trade buyers (including PE firms).
Systemax Inc. (NYSE: SYX) has won the auction for the ecommerce business and intellectual property of bankrupt retailer Circuit City. The deal is valued at $14 million, plus a share of future revenue generated from those assets over a 30-month period. Gordon Brothers Brands and Hilco Consumer Capital were origin! ally reported to have an interest in Circuit City, but did not participate in the final process.
Windsong Brands and Marvin Traub Associates have acquired the Carlos Falchi handbag brand, and named Carlos Fachi as chief designer and creative director of the newly-formed company (Fachi Holdings LLC). No financial terms were disclosed.
A U.S. Bankruptcy Court judge ruled that Credit Suisse’s $375 million loan to the Yellowstone Club was “predatory,” and that Credit Suisse will now have to step behind other creditors like DIP financing provider CrossHarbor Capital Partners.
PE Exits
Oracle Corp. has agreed to acquire Virtual Iron, a Lowell, Mass.-based provider of enterprise server virtualization solutions. No financial terms were disclosed. Virtual Iron has raised around $65 million in VC funding since 2003, from firms like Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures.
Firms & Funds
Bio Equity Risk Management has formed as a Boston-based investment firm focused on special situations opportunities in the healthcare industry. The firm’s co-founding managing partners are Nessan Bermingham, a former partner with Omega Funds, and Joseph Siletto, who previously was with Cowen & Company.
Candover Investments PLC said that it has received multiple approaches to acquire the company outright, or to buy a minority stake.
DCM has held a $350 million first close on its sixth fund, according to VentureWire. The fund has a $505 million target, and will focus on early-stage opportunities in the IT space. www.dcm.com
Energy Investors Funds has begun marketing its fourth fund, with a target it excess of $2 billion.
First Reserve Corp. marked down its $7.8 billion eleventh fund by 15% at year-end 2008, according to LBO Wire. The energy-focused fund was 68% called down. www.firstreserve.com
Oak Investment Partners is planning a June final close on its eighth fund, with around $1.5 billion in capital commitments.
Human Resources
Douglas Brown and Alexander Chefetz have joined Lazard Middle Markets as managing directors. Brown will focus on the healthcare sector out of Lazard’s Charlotte office, and previously was with Wachovia Securities. Chefetz will focus on the consumer products se! ctor out of Lazard’s New York office, and previously was with Thomas Weisel Partners.
Alan Crane has been named a general partner with Polaris Venture Partners. He has been a venture partner with the firm since 2002, during which time he has served as CEO of both Cerulean Pharmaceuticals and Momenta Pharmaceuticals.
Kalpana Desai has stepped down as Bank of America’s head of Asia-Pacific M&A. She had spent more than a decade in Hong Kong with Merrill Lynch, and joined Bank of America after it acquired Merrill earlier this year.
Charles Li has resigned as head of JPMorgan’s China operations. A Hong Kong newspaper reports that he will take over as CEO of Hong Kong Exchanges & Clearing Ltd., which operates the Hong Kong stock market. !
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