Private Equity: The Hottest Thing In Utah –

Utah received two encouraging signs that private equity dollars may flow more freely in the future. The state has a new private equity firm stocked with recognizable names, and the state legislature is working through a bill that would start a state fund-of-funds modeled after programs in Ohio and Oklahoma.

Former Salt Lake Organizing Committee COO Fraser Bullock recently founded Sorenson Capital, a private equity investment firm. Sorenson Capital is named for Jim Sorenson, the former CEO of Sorenson Media. His family is an investor in the firm. According to SEC documents filed Jan. 27, Sorenson Capital has so far raised $75 million of a fund targeted to close at $275 million. The firm is expected to focus on buyouts and acquisitions of companies with revenue between $50 million and $100 million.

Five general partners including Bullock will manage the new firm. The other four general partners are Ronald Mika, a managing director with Bain Capital; Richard Lawson, former president of Bain Capital portfolio company Found Inc.; Timothy Layton, a managing director of Alpine Consolidation; and Steve Young, former professional football player and former chairman of Found. Based in Sandy, Utah, Sorenson Capital will have a satellite office in Palo Alto, Calif.

The new firm’s announcement comes on the heels of the Venture Capital Enhancement Act (HB 240), which was introduced in the Utah State Assembly by State Representative Peggy Wallace. If it becomes law, the legislation would create a $100 million Utah fund-of-funds to invest in between 10 and 15 venture capital funds that are Utah-based or the fund-of-funds will invest directly in Utah companies.

Similar to a 10-year-old venture capital program in Oklahoma and Iowa and a recently established program in Ohio, Utah’s Venture Capital Enhancement Act would encourage large companies and financial institutions to invest in the fund using “contingent tax credits” to cover potential losses. The state will use a local venture capital or private equity fund to manage the fund-of-funds’ investments. If these investors do not receive their principal plus 5% or 6%, they can present this loss to the state for tax credits. The legislation restricts the amount that may be claimed to $20 million per year.