ProVen Private Equity, which in January this year announced that it had sold a majority stake in its management company to GMA, the Michigan-based investment banking boutique, is to rearrange its latest fund raised – Global Rights II – to significantly up its fire power. The merged ProVen and GMA became known as Beringea following the deal, however the ProVen trade name continues to exist.
Power cites a major motivating factor in the merger as the expertise that GMA possessed in terms of exiting businesses. GMA’s business is predominantly focused on fund raisings and selling businesses. GAM and ProVen’s relationship dates back some eight years prior to the merger.
ProVen, which emerged following a buyout from Guinness Mahon in 1998 under the leadership of Gordon Power who is currently executive chairman, has an unusual plan for the undrawn and uncommitted capital residing in Global Rights II. Global Rights II raised $64 million in September 2001, of which $22 million has already been allocated. ProVen proposes to equally split the remaining $42 million between two separate funds, one targeted at US investments and another at European investments. It is envisaged that further fund raising will result in the new European fund being capped at EURO150 million while the US fund is capped at $100 million.
The fund raising process will continue the unconventional theme. Power and colleagues at ProVen are in the midst of negotiations that, if successful, effectively constitute a joint venture arrangement with an unnamed private equity and M&A outfit in both Spain and Germany. The attraction in having a German partner is simply access to quality German deal flow whereas the Spanish language, given the rising importance of the Spanish language in North America, is attractive, explicable given ProVen’s strengths and experience centre around brands, media, content and IP rights. It also has strength in healthcare although this is predominantly of interest to the US-based (Michigan) end of the partnership.
The existing affiliate relationship in Helsinki (Berginea owns 23 per cent of the management company), sought for the areas expertise in wireless networks, is also expected to contribute to the new fund raising process.