The Private Equity Analyst: Guide To The Secondary Market
The Private Equity Analyst: Guide To The Secondary Market
The Private Equity Analyst: Guide To The Secondary Market
2004 Edition
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Robert Dunn
Laura Kreutzer
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Tom Brady
Tuncel Gokcepinar
Tara M. Sapienza
Jodi Tsui
EDITOR
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David M. Toll
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Kenneth Andersen
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Jim Beecher
San Francisco
Wellesley
London
Tel 781.304.1400
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ISBN# 1-893648-58-3 | THE PRIVATE EQUITY ANALYST GUIDE TO THE SECONDARY MARKET is published by the Alternative Investor, located at 888 Worcester Street, 3rd Floor, Wellesley, MA 02482.
Cover price $595. Contact [email protected] >> COPYRIGHT 2004 by Alternative Investor. All rights reserved. No part of this publication may be reproduced in any form or by any meansgraphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systemswithout the express written permission of Alternative Investor. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Alternative Investor, its officers, employees, or agents may hold positions in any of the securities mentioned herein.
Table of Contents
I.
ARTICLES Secondary Market Begins Fulfilling High Expectations in 2003 Sree Vidya Bhaktavatsalam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Secondary Prices: A Rising Tide | By Todd Konkel, CFA, Cogent Partners . . . . . . . . . . 8 The Secondary Market: Sellers Challenge Buyers to be More Creative By Brett A. Gordon and John M. Toomey Jr., HarbourVest Partners LLC . . . . . . . 12 Secondary Directs: How to Team with A Winner By Gretchen Knoell with Zachary Abrams, Lake Street Capital . . . . . . . . . . . . . . 16 The Anatomy of a Secondary Transaction: Issues for 2004 & Beyond By Lawrence E. Penn III and A. Oliver Welsch-Lehmann, The Camelot Group International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Making Money in Small Secondary Transactions By Chuck Stetson, David Parshall and Gunnar Fremuth, Private Equity Investors, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 How to Select Secondary Funds By Charles Soulignac, Fondinvest Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
II. III.
SECONDARY MARKET TIMELINE | Fund-raising, deal volumne, 1990-2003 . . . 28-29 FIRM LISTINGS Secondary Buyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Intermediaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Secondary-direct Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
IV. V.
RANKINGS | Secondary Buyers by Assets Under Management . . . . . . . . . . . . . . . . . 65 INDEXES by Firm Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 by Interests Sought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 by Contact Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 by Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
V.
econdary deal volume soared to record heights last year, finally living up to the lofty hopes that buyers had for it.
Banks and financial services companies drove the sales of limited partnership interests to new records in 2003, as Deutsche Bank AG, UBS AG and others completed sales of fund portfolios that they started shopping around in the early 2000s. Banks which accelerated their commitments to private equity in the late 1990sstrove to unload those assets to meet capital reserve requirements and to reduce their exposure to the volatility of the asset class. Corporations continued to be active sellers of private equity portfolios, as they moved to cut investment losses from venture-oriented investments made in the late 1990s and concentrate on their main-line businesses. Pension funds, by and large, still sat on the fence, although we did see a handful of them start exploring options to dispose of problem investments. All told, global secondary sales of fund interests jumped to $4.6 billion last year, up from $1.9 billion the previous year, according to statistics compiled by secondary buyer Lexington Partners, New York. Last years tally dwarfed the $3 billion of secondary deal volume in 2000 the previous record for secondary sales. (See timeline, pages 28-29.) Meanwhile, secondary buyers stood ready to snap up assets with unprecedented amounts of cash at their disposal: Over the last three years, secondary buyers all over the world have collectively raised more than $10 billion.
ers. In 2001 and 2002, the volume of secondary sales was relatively weak partly because of sticker shock, as sellers (especially those with younger fund interests to sell) balked at the low offers made by potential buyers. For their part, buyers were extremely picky about how much they would pay for fund interests, as the outlook for exits still looked extremely bleak. But in 2003, the gap between the price expectations of the seller and the price point of the buyer narrowed, says Principal Wilson S. Warren of Lexington Partners. Buyers were willing to pay more for LBO fund portfolios, for example, in part because of an improving climate for exits, Mr. Warren says. Managing Director Jay Pierrepont of Pantheon Ventures, the London and San Francisco-based secondary buyer, says that in 2001 and 2002, many sellers had yet to go through writing down the values of their portfolios, and were alarmed at the steep discounts proposed by secondary buyers. Sellers also had a hard time promoting such sales to their boards or shareholders, since they would almost immediately result in large write-downs. But now, after several quarters of gradual writedowns, the discounts are not as high, and sellers are psychologically able to bring themselves to sell their portfolios, Mr. Pierrepont says. On the buy side, firms that have been amassing ever-growing pools of capital in the last few years, were itching to put their money to work. There is a lot of demand from secondary buyers, especially as many have specific time limits to put their money to work, says Lawrence E. Penn III, a managing director at New York-based advisory firm The Camelot Group International. Deutsche Bank last year sold a roughly $500 mil-
lion portfolio of fund interests to Credit Suisse First Boston, New York. That portfolio was part of a nearly $3 billion portfolio that Deutsche Bank owned as part of its acquisition of Bankers Trust in 1999, according to sources. Deutsche Bank continues to manage limited partnership interests through its third-party funds of funds. Deutsche Bank in late 2001 decided to scale down its exposure to private equity in order to reduce volatility in its earnings statements, and to lower its cash reserve requirements. In another large transaction last year, UBS sold a stake in a $1.3 billion portfolio of fund interests to HarbourVest Partners LLC, Boston. The Swiss bank retained rights to a portion of the distributions from the portfolio of more than 50 LBO and venture capital funds. The portfolios estimated net asset value at the time of the sale was $750 million, according to one secondary buyer. Such profit-sharing structures are likely to become more popular among sellers, especially those that want to reduce their exposure to the asset class but still want to enjoy some upside from the improving exit environment.
Likely Sellers
Allianz AG
Allianz AG, which already has a sizable fund portfolio, acquired Dresdner Bank in 2002. As part of a plan to reorganize its private equity business, the bank plans to pare down the 4 billion euros ($4.8 billion) Dresdner portfolio, sources say.
hold in reserve to guard against losses in their private equity portfolios. Also expected to sell interests this year is German bank Allianz AG, which has been looking to unload the private equity portfolio it inherited through the acquisition of Dresdner Bank.
History has shown that secondary deal volume tends to show an uptick in the years following a surge in primary fund-raising. In the late 1980s, for example, a small bubble in fund-raising was followed by a noticeable increase in secondary sales. Thats because 1.5 percent to 3 percent of all primary partnership commitments get traded on the secondary market, according to various estimates by secondary buyers. Indeed, over the next two or three years, secondary buyers say that the sale of fund interests promises to be strong, given the phenomenal swell of primary fund-raising from 1999 to 2001. Managing Partner Brent R. Nicklas of Lexington Partners anticipates that the fund-raising inventory from the bubble years should keep secondary buyers busy until at least 2006. Were still feeding off of the crest of the fundraising wave, he says, pointing to the nearly $400 billion that was raised by private equity firms during that time period.
are beginning to use the secondary market to prune their fund portfolios, and shed some problem investments. Connecticut State Retirement & Trust Funds, Pennsylvania State Employees Retirement System, Philadelphia City Board of Pensions and Investments and other investors recently sold their interests in a fund managed by Keystone Venture Capital Management Co.a venture firm whose former general partner is being investigated for possible securities fraud. Meanwhile, Connecticut State Retirement & Trust Funds continues to try to sell its interests in funds managed by Boston-based Triumph Capital, whose founder and former chairman faces a one-year prison sentence for improperly rewarding former Connecticut state treasurer Paul Silvester in return for a commitment to a fund. We are seeing a slow trickle of interest from pension funds that are looking to rebalance their portfolios by using the secondary market, says Pantheons Mr. Pierrepont. But for the secondary market to continue to grow in the years to come, pension funds will have to show more than a trickle of interest in the secondary market; it will have to be more like a flood.
About the author: Sree Vidya Bhaktavatsalam is an associate editor with The Private Equity Analyst. Her responsibilities include covering the primary and secondary fund-raising markets, and secondary sales. Reach her at [email protected]
he secondary market for private equity has traditionally been a buyers marketone where a small number of specialized buyers were able to take advantage of seller motivations and market opacity to acquire partnership interests at attractive prices.
Secondary funds have typically achieved historic returns near 25 percent, well above the 13.4 percent average 10-year returns for all private equity. A number of forces, including greater pricing transparency brought by market intermediaries, increased competition among secondary specialists, the entry of nontraditional secondary buyers and the use of leveraged structures, are reshaping the secondary marketplace. These demand-side factors, combined with improving market conditions, spell continued strengthening of secondary transaction prices in 2004.
few years, funds-of-funds managers with capital to invest turned to the secondary market, building expertise once held exclusively by dedicated specialists. As a result of their success in the market, many fund-of-funds managers are spending more time seeking and negotiating secondary transactions. For example, HarbourVest Partners LLC, Boston, one of the largest fund-of-funds managers, invested $900 million in secondary deals in 2003, up from $100 million in 2001. Endowments, foundations and pensions, both domestic and foreign, have also entered the market, affecting pricing by injecting additional demand and reducing the underwriting rates for transactions. Compared to both dedicated secondary firms and traditional funds-of-funds managers, which must consider their own layer of fees and carried interest when projecting net returns to investors, non-traditional buyers have a lower cost of capital. With lower underwriting rates, these new market participants can outbid specialists in competitive situations. Of note is the widening range of transaction types that non-traditional secondary buyers are willing to pursue. Investors are no longer content to participate only in transactions involving single limited partnership interests, and they are looking beyond deals sourced from general partners and limited partners. Last year, several multi-hundred million dollar portfolios, once the sole domain of secondary specialists, were purchased by non-traditional secondary buyers. Reinforcing the effect of the increasing number of secondary buyers is the continued presence of significant pools of capital managed by dedicated secondary firms. A number of secondary specialists, such as Coller Capital, London, and Lexington Partners, New York, have large amounts of uncalled
capital to put to work in 2004 and 2005. In July 2003, for example, Lexington Partners closed on $2 billion in capital for its most recent secondary fund, Lexington Capital Partners V, L.P. Also, secondary buyers who have exhausted their latest funds are likely to come back to the market to raise additional capital later this year. Goldman Sachs & Co., which has fully invested its $1.1 billion GS Vintage II secondary fund, has indicated plans to raise nearly $1 billion for its third secondary fund.
Coller International Partners IV Lexington Capital Partners V CSFB Strategic Partners II GS Vintage III Paul Capital Partners VIII Landmark Equity Partners XI Pantheon Global Secondary Fund II Auda Secondary Fund TIFF Secondary Partners I
number of investors more bullish on the outlook for their private equity investments. For some institutional investors, the growth of public indices provides hope that general partners will be able to exit their investments at favorable valuations. Similarly, recent increases in venture-backed IPO and M&A activity have encouraged venture investors. They believe that the opportunity for near-term liquidity may be improving. Market indicators helping to drive the bullish outlook include the following: From October 9, 2002 through March 31, 2004, the Nasdaq composite rose 79 percent, and the Dow Jones Industrial Average rose more than 42 percent. In the fourth quarter of 2003, venture-backed merger and acquisition valuations (for deals with disclosed values) were 29 percent higher than the average deal value for the same period a year ago (NVCA). In the fourth quarter 2003, there were 17 venture-backed IPOs in the U.S., equaling the combined total from the previous five quarters (NVCA). Similarly, in the fourth quarter 2003, there were 14 buyout-backed IPOs in the U.S., equaling the combined total from the previous four quarters (NVCA). A recent statement by Mark Heeson, president of the National Venture Capital Association, echoes the sentiments of many venture fund investors: Rising valuations represent good news, as such a trend will support stronger private equity performance. As a result of this improved market outlook among institutional investors, many potential sellers are approaching the secondary market with elevated pricing expectations.
Market Recovery
A number of market forces are also driving increased prices in the secondary market. First, recent improvements in the public markets have made a
40 30
26
38
20 10
2 1 7 7 4 1 1
19 14 9 3 0 2 5 6
17 13 13
Q302
Q402
Q103
Q203
Q303
Q403
Q104
Source: NVCA
investments over the past 13 months through special dividends financed by selling junk bonds and issuing bank loans. Further, financial sponsors eager to deploy capital before the expiration of their investment periods have led to increased sales of buyout investments from one private equity fund to another. Meanwhile, venture firms have had increased success generating exits resulting from IPOs and venture-backed M&A activity. The increased distributions by GPs give secondary buyers improved visibility and confidence in the ultimate performance of a potential fund investment. As with any investment, a reduction in risk improves the risk-adjusted return and increases the
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price a buyer is willing to pay. Through the first quarter of 2003, large takedowns by private equity funds, coupled with depressed levels of distributions, placed a significant liquidity strain on many investors. As a result, limited partners with short-term liquidity needs were often willing to sell their fund interests at sharp discounts in order to alleviate their cash flow strain and to avoid the obligations posed by future capital calls.
Beyond Liquidity
Recent distributions from private equity partnerships, combined with public market gains, have lessened pressure on investors to seek secondary sales for
Contributions Distributions
generally more reluctant to sell fund interests at a loss. Unburdened by short-term liquidity constraints, investors can selectively sell only those assets that garner superior pricing in the market.
Down to Earth?
$8.7 $7.7 $6.9
Q103
Q203
Q303
Source: NVCA
liquidity reasons alone. Today, an increasing number of institutional investors are using secondary transactions as a portfolio management tool. Investors may look to secondary transactions as a means to trim their portfolios back in order to focus on core general partner relationships or to manage asset allocation. Sellers who use secondaries for such strategic purposes are
The confluence of several simultaneous trends, including demand-side forces and market dynamics, is transforming the private equity secondary market. From an ever-expanding buyer base to sellers with heightened pricing expectations, secondary transaction prices are being pushed upward. Secondary buyers who benefited from market conditions in previous years may soon see the attractive prices and heady returns they have enjoyed for so long become a thing of the past.
About the author: Todd Konkel is a vice president at Cogent Partners, L.P., where he has managed secondary advisory engagements and currently leads Cogents private equity research efforts. He is a CFA Charterholder. Reach him at [email protected].
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or one of the first times in the history of the secondary market, the breadth and depth of buyers provides sellers with the opportunity to do more than simply maximize price. As demonstrated by a number of recent transactions, a seller who thinks strategically can use a secondary sale to provide a solution to cash flow, earnings volatility, and other challenges while still enjoying the benefits of active participation in the private equity market.
to an end. What caused this change? Too many investors chasing Internet dreams
Europe U.S.
$45.2
$25.5
100 50
$4.9 $4.9 $16.4 $9.3 $42.6
$181.9
Historical Perspective
Todays burgeoning secondary market is the result of the tremendous inflow of capital to the private equity asset class in the late 1990s. The secondary market of the late 1980s and the early 1990s was simple: Sellers sold by necessity and a limited number of buyers bought. This may be an over-simplification, but surprisingly it is not far from the truth. During the early days of the private equity secondary market, sellers sold assets to generate liquidity, to reduce funding obligations, to rebalance their private and public equity portfolios, to divest assets from underperforming managers, or to exit the asset class entirely. Given that the private equity asset class was considered highly illiquid, anyone interested in selling was branded distressed, and the prices offered reflected this. With these motivations and a limited number of buyers, sellers quickly accepted the best offer available, and a cottage industryprivate equity secondarieswas created. Like most good things, secondary buyers ability to complete deals without attracting attention came
$8.3
1991
1992
1996
1997
1998
1999
2000
Investors poured money into private equity during the late 1990s as everyone was hoping to benefit from the roaring public markets. After the bubble burst in April 2000, many investors found themselves unable or unwilling to honor their funding commitments to private equity funds.
2.0
$0.866 $0.97 $1.018
Sellers sensing opportunities sought to dispose of all types of assets and portfolios: fully funded limited partnership interests, largely unfunded commitments, single assets, multiple assets, portfolios of direct deals, economic interests, and others to name a few. Not only did the assets available for sale change, but the objectives associated with a sale changed as well. Obtaining the best price, achieving liquidity, and reducing exposure were admirable goals but they were no longer enough for sellers. Publicly-traded entities wanted to reduce the earnings volatility caused by these assets, but they wanted to somehow remain investors in the asset class and maintain relationships with the general partners. Other sellers wanted to rid themselves of their investments but wanted to participate in any potential upside as insurance against an untimely sale. Large organizations looked to sell assets and shut down internal partnership and direct investment programs, but they also wanted to ensure that any sale included a solution for existing employees. With these new goals in mind, cash at close is no longer king. Sellers today are smarter, more strategic, and target numerous objectives as part of any sale process. How can a seller of an illiquid asset have such lofty expectations? An extraordinary amount of capital competing for deal flow affords sellers the opportunity to satisfy numerous objectives as part of a sales process. For the traditional secondary buyer, even more discouraging is that sophisticated sellers are finding ways to entice new and non-traditional entrants into the market, creating opportunities for new types of buyers and new types of transactions.
$0.111
$0.051
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03
Source: The Private Equity Analyst
$0.1
$0.424
1.0
$0.753
$1.647
cottage industry. However, buyers were not the only ones to take notice. Potential sellers did as well. The selling spree of the past few years has proven to investors that private equity is no longer an illiquid investment. With this knowledge, new sellers have emerged, seeking alternative means to generate liquidity instead of simply holding their private equity assets until maturity.
$3.432
$2.424
$2.348
$2.999
sellers are forcing buyers to compete aggressively for transactions. This rivalry allows sellers to satisfy numerous, diverse, and, some would argue, improbable objectives. For buyers, evolving demands of sellers may seem troublesome at first, especially as new entrants continue to infiltrate the market. However, buyers that are willing to be creative and develop in-house secondary expertise should also fare well in a more competitive and more complex secondary market.
nies. Institutional investors rely on HarbourVest for diversification across all segments of the private equity asset classventure capital, buyout, and mezzanine investments around the globe. In 2003, HarbourVest completed a number of secondary transactions. The two most notable of these were co-leading a 1.6 billion management buyout of a direct investment portfolio and completing a structured transaction in which HarbourVest entered into a joint venture to purchase a portfolio of partnership investments representing $1.3 billion of original commitments. Today, HarbourVest has over $2.0 billion available to acquire secondary positions in private equity assets worldwide.
About the authors: Brett A. Gordon joined HarbourVest in 1998, after serving as vice president of The Princeton Review of Boston. Mr. Toomey joined the firm in 1997 after spending two years as an analyst at Smith Barney. For further information, please contact Brett Gordon at [email protected] or John Toomey at [email protected].
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ne of the emerging segments of the secondary market, yet to be fully mined, is secondary directs.
Unlike most secondary buyers, which acquire interest in limited partnerships, secondary-direct buyers acquire interests directly in privately held companies. They then pursue opportunities, just like traditional venture capitalists, to generate liquidity. Our view is that secondary directs are the hidden gems of the secondary market, provided you have the right manager. So how do you find the right manager? We recommend identifying one that possesses the combination of skills and relationships necessary to be successful in this specialty.
sticking to its original bid and closing within a reasonable timeframe. In addition, you would recognize that a secondary-direct manager needs the portfolio company managers to be open and honest regarding their underlying business strength, financing requirements and future expectations. If the portfolio company managers sees the buyer as a potential source of future capital, that presents an additional incentive to be forthcoming.
Choose a Leader
As in the greater venture and buyout markets, secondary-direct managers with leading brandnames have a distinct advantage over the multitude of alternatives. One of these advantages is credibility with the sellers and managers of the underlying portfolio companies. Imagine you are the treasurer of a Fortune 500 company and you intend to sell your CEO on the idea of divesting a substantial portfolio of assets. The process is expected to take three to six months, cost $200,000 or more in legal bills, and potentially impact your relationship with a large number of companies, some of which may be your customers, suppliers or partners. Naturally, you most likely want to tell the CEO that the potential acquirer is one of the top secondary-direct firms focused on the market, that the firm has executed several transactions in the past with companies similar to yours (and have good references to show for it), and that the firm has a reputation for
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to the following things: 1) the underlying potential of the companies and the timing of future liquidity events, 2) the value of the investments to the seller and perhaps to other investors (because of the rights of first refusal that often accompany the investments), and 3) which companies will generate the best returns from additional invested capital. It is absolutely critical for a secondary-direct buyer to understand value creation and liquidity options. During the purchase process, the bidder needs to understand existing value as well as the opportunity to create value through strategic advice and follow-on investments. This is not about applying arbitrary discounts to net asset values. The bidder needs toprioritize the companies in the portfolio for sale, conduct meaningful due diligence, and estimate potential exit valuations. This is particularly complex given the numbers of companies across multiple industries in a typical portfolio. Understanding the potential for an exit and possessing the skills to help the portfolio companies achieve their exits are critical. After the deal is completed, disciplined, strategically placed follow-on investments help drive returns. The secondary-direct firm must be very careful when determining whether to increase its financial commitment. A typical fund must reserve one to two times the purchase price for follow-on investments. The manager can not fall in love with a technology or company. Rather, there needs to be a disciplined and methodical approach to making follow-on investments. While the typical venture capitalist, and particularly the buyout professional, prefers taking large controlling positions in fewer companies, secondarydirect managers must be comfortable managing a large portfolio with small minority stakes. Venture capitalists traditionally play an active role in company strategy and management, often taking seats on the board. The typical corporate investor does not have board seats but instead has board observation rights. It is critical for secondary-direct buyers to prioritize the companies where they can add value, and work toward having influence with other investors and
with entrepreneurs. Consistent with traditional portfolio management theory, there is an advantage to having more companies in the portfolio. It increases the probability of exits, and diversification helps to eliminate unique risk. In addition, the secondary-direct buyer is managing the portfolio for liquidity. In this regard, not only do buyers need to understand complex term sheets, investor rights, and liquidity preferences, but they also need to have strong negotiation skills in order to protect their position. In todays financing environment of cram-down rounds, complex bridge loans, and recapitalizations, investors interests are often not aligned; the early investor with a large ownership stake has a different agenda than the recent investor with high-preference dollars. Typically, it is impossible to carry all the preference dollars forward, so that investors with the most dollars invested are at odds with those with the highest ownership positions. The secondary-direct buyer needs to understand who holds what blocking rights and then use those rights to maximize return. While industry knowledge is important, a proven track record in financial structuring and liquidity creation is crucial. It is also important to align with other investors to gain the necessary leverage to protect your positionsort of a venture capital version of Survivor. With respect to liquidity events, the secondarydirect buyer must be a dispassionate investor with a realistic view of acceptable returns. Recently, several of our portfolio companies have received acquisition offers from private companies where we had the option to either take our pro rata of cash on the balance sheet or roll our investment into the new company. While these offers may involve a relatively modest return by venture capital standards (perhaps two to three times the invested capital), the relative impact to the portfolio on an internal rate of return basis is important to consider. We often take the cash today versus a potential exit 18 to 24
months down the road. Our goal is to maximize internal rate of return through early liquidity.
About the authors: Gretchen Knoell and Zachary Abrams are founding partners of Lake Street Capital, one of the leading funds focused on the secondary direct market, funded by institutional investors including Pantheon Ventures and Pomona Capital. Contacts can be reached at [email protected], [email protected], [email protected] and [email protected].
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increased consistently during the previous five years from approximately $1.5 billion in 1998 to a record $4.6 billion in 2003. The main factors fueling this growth include the following: the slowdown in distributions from venture and buyout funds; the desire on the part of limited partners to manage portfolios more actively; the desire on the part of the investor to manage general partner relationships more actively; the changing legal, tax and regulatory framework in different jurisdictions; mergers and acquisitions by institutional investors, corporations and fund sponsors; and the changing needs of wealthy investors. Compared to primary private equity investments, secondary market transactions usually offer strikingly favorable return propositions to prospective buyers, and generally yield key strategic advantages such as greater portfolio transparency and maturity. As a result, record amounts of dedicated secondary capital have been raised over the previous four years. Currently, the total amount of dedicated secondary capital exceeds $17 billion, and new participants continue to enter the market. Key to increased deal flow in the secondary market has recently been the significantly reduced average age of partnership interests sold. While the average age of limited partnership interests sold exceeded seven years in 1998, recent transactions included an increasing number of younger funds, averaging three to four years old, during the first half of 2003. As far as average deal sizes are concerned, transactions recently tend to be smaller due to the considerably increased activity by wealth investors, endowments and foundations. Nevertheless, top-quartile deal sizes continue to aver-
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age over $250 million, which is not expected to change near term.
Pressure on Pensions
Despite the increasing growth of the secondary market, and the steady growth in the number of completed transactions across virtually all significant investor groups, including institutional investors, corporations, foundations and general partners, one investor group has been largely absent from the secondary market to date despite their present precarious conditions. That group is the 123 public pension systems in the United States. As of August 2003, public pension systems in the United States are underfunded by more than $180 billion (in total, the underfunding by public and private pension systems in the United States exceeds $300 billion, far exceeding the resources of the Pension Benefit Guarantee Corporation). As a result of the combination of increased allocations to alternative investments, in conjunction with the challenging conditions in the public and private equity markets over the previous three years, losses faced by U.S. pension systems exceed billions of dollars. In the aggregate, U.S. public pension assets shrank 6 percent in 2002, while liabilities grew by more than 10 percent. As a result, many pension systems significantly exceeded their allocations to alternative assets, including private equity. In view of rising liquidity needs associated with increasing pension pay-outs, many pension systems currently face a dangerous dilemma, which is the need to actively manage their private equity portfolios despite the inherent characteristics of the asset class--its long maturities and lack of liquidity. In order to return to targeted allocation levels and achieve liquidity quickly, these pension systems have recently evaluated the possibility of a transaction in the secondary market for private equity. Challenges that pension fund managers need to overcome frequently include valuation misconceptions, as well as the lack of awareness of viable structuring options. Since the discontinuation of new
investments is generally insufficient to ensure a return to allocation targets, a managed sale of private equity interests in the secondary market under the professional guidance of a qualified secondary advisor is increasingly understood to be the sole viable option for over-allocated public pension systems in the United States.
Benefits of An Advisor
Advisors help overcome major obstacles such as frequently high seller reluctance in view of pricing uncertainties and lack of awareness relative to the optimal transaction structure and management. Established players as well as new entrants know that the transfers of limited partnership interests as well as portfolios of direct company interests can be a time-consuming process that often requires complex structures given widely-varying legal, tax, and regulatory environments. Not unlike corporate M&A transactions, most secondary sellers are unfamiliar with the process, since secondary transactions occur infrequently and the required up-to-date expertise of the market conditions and participants is not always available in-house. Potential sellers often cite the lack of resources to allocate to the process, as well as the need for confidentiality and the growing concern of the embarrassment factor inherent in a sale below the fair market value. Qualified advisors facilitate transactions by providing a degree of standardization and consistency to transaction management. They address the markets need for a more formal and systematic mechanism for the exchange of limited partnership interests and portfolios of direct company interests. Their consistent methods of portfolio assessment and valuation are as much of interest as are their professional and timely transaction execution.
Anatomy of a Transaction
Secondary market advisory specialist firms manage all aspects of the secondary sale process and help accomplish widely varying investor objectives. These include the realization of fair value for investments, as well as the timely and professional completion of
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a transaction in a highly confidential manner. The transaction management is generally divided in three distinct phasestransaction origination, structuring, and execution. Transaction origination: During this stage, advisors evaluate the specifics of the investor situation and motivation and determine the feasibility of a transaction. Here, it is important to analyze the specific objectives of the investor, and to provide up-to-date information relative to current market conditions and recent realizations in the respective segment of the private equity industry. Transaction structuring: In the structuring phase, good advisors determine the most efficient transaction structure within the respective legal, tax, and regulatory environment and create an appropriate divestiture strategy with specific milestones and targets. Subsequently, advisors reach out to a salient group of highly motivated buyers, picked in conjunction with the seller, typically from a database of active purchasers around the world. Advisors usually organize a man-
aged auction to ensure best value for the selling client. This phase generally comprises three to four weeks. Transaction management and execution: Upon completion of the determination of the optimal transaction structure, the completion of the relevant transaction due diligence and completion of a concise offering memorandum, advisors guide the sale process through the creation of the relevant legal agreements, such as purchase and transfer agreements. Agreements can generally be drafted without outside legal counsel. To ensure efficient and timely execution, top advisors provide detailed guidance on all important required steps to execute the transfer. These include determination of the salient transfer conditions, including co-investor rights and consents and the receipt thereof.
About the author: Lawrence E. Penn III is Managing Director and Head of the Secondaries Practice at The Camelot Group International. He can be contacted on (212) 332-7166 or at [email protected]
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ecently, several sellers of small portfolios of private equity fund interests told us they could not get the attention of many traditional secondary buyers. It seemed that these deals were simply not worth their while. We believe this is a function of the changing landscape of the secondary market. Small portfolios, which, today, we consider to be less than $25 million in net asset value or under $15 million in purchase price, have been eschewed in favor of the large secondary sales by banks and corporate investors.
Amount Raised by Secondary Funds From 2001 to 2003, by Fund Size ($B)
$12B 10.0 8.0
Less Than $500M $500M to $999M $1B or More
$0.6 $3.0
5 Funds 6 Funds
larger funds than in the past, including two dedicated secondary funds at $2 billion or more in commitments. In the three years from 2001 to 2003, nearly 95% of the total $10.6 billion raised by secondary firms went to funds that raised more than $500 million, or an average of $1.1 billion per fund. Large transactions, by their nature, can be all-consuming. Since a large sale has such an impact on the bottom line of the seller, more and more of these big deals are becoming highly complex structured transactions. As a result, buyers must spend significantly more time and resources on the business and legal aspects of the deal. In some cases, staff has been dedicated to a single transaction for many months, even a year or more. Buyers, however, feel that the opportunity to purchase a large portfolio is commensurately rewarding and justifies their focus on these deals. The changes in the size of secondary funds and complexity of large transactions have greatly impacted small transactions as they become less and less interesting to the large secondary funds. We are finding that many of the biggest firms, which in the past had been interested in small transactions, are now less involved in this area. Thus, sellers of small portfolios who want to have a high level of service need to consider a buyer that will provide senior level attention to their transaction.
4 Funds
4.0 2.0 0
2001
2002
2003
3-year Total
Source: The Private Equity Analyst
Several secondary funds are now focusing and have always primarily focused on small secondary transations. They serve this portion of the market by providing an equivalent degree of service to sellers of small portfolios as the large secondary funds do for large portfolios. This is critical because a small transaction of a single fund interest or a portfolio of
24
interests has the same analytical issues that a large transaction has. Even when a buyer has an existing position in the fund being sold, the buyer must conduct thorough due diligence. Companies in the portfolio are dynamic, often with significant changes occurring from one quarter to the next in terms of financial results and outlook for liquidity. Changes in the market environment can have an equally significant impact, including on the exit strategy (such as accessing the high-yield market to recapitalize companies rather than push for a sale of the business), on transaction values, and, of course, on exit timing. Generally, a detailed legal review must be undertaken if the situation is new to the potential buyer. Purchase agreements must be crafted for the transaction and rights of first refusal, if applicable, must be dealt with appropriately. Sellers want to minimize execution risk and to ensure that a transaction can be closed on a timely basis. This is also important to general partners as sales of interests in their funds are a distraction from their businesses, and they want to spend the least time possible on such transactions.
in light of our extensive experience in this area. In such situations, we have found the analysis of venture capital and other private equity funds that need to be wound down is similar to buying a limited partnership interest in that fund. The analysis focuses on the meaningful holdings, which by this point are mature and should have operating track records. The differences are that instead of owning a small percentage of the fund, we end up buying 100 percent of it and the co-investors of the portfolio companies become increasingly important in managing the exit of the individual positions. More recently, we have been asked by individual managers of corporate venture programs whether we could assist them in by buying a portion or their entire venture portfolio. Many of these programs invested large amounts of capital over the past several years but the value has decreased significantly due to liquidations and valuation adjustments. The result is that the portfolios being sold are typically small by our standards. This situation and analysis is similar to the wind-down of a venture capital fund that we have just described, so the seller must find an appropriate buyer willing to devote the time and resources to the transaction. Investors, fund managers, and corporate venture programs all need to periodically adjust their portfolios or perhaps sell all of it. This can range from divesting a single limited partnership interest to a portfolio of many partnership interests or a portfolio of holdings in companies. If the transaction is smallthat is, under $25 million in net asset value or $15 million in selling pricea small experienced secondary buyer can give a seller the attention necessary to complete the transaction in a fair, efficient and timely fashion.
About the Authors: Mr. Stetson and Mr. Parshall co-founded Private Equity Investors in 1992, while Mr. Fremuth joined in 1996. Reach them at (212) 750-1228, [email protected], [email protected], [email protected].
25
he typical secondary transaction involves the sale of an interest in a limited partnership that has been 60 percent to 65 percent drawn down, and that was launched at least four years ago. Some secondary transactions involve the sale of a portfolio of direct interests in companies. The portfolio may then be managed by the team that assembled it or by a new management team.
The secondary market dates back to the global economic crisis of early 1990s, when many banks and corporations began selling illiquid assets, including interests in private equity funds. The interest from sellers, which in turn attracted buyers, led to the evolution of an active secondary market. Acquisitions of secondary positions offer the following advantages to buyers: Secondary market positions can usually be purchased at a discount to net asset value, especially if the purchaser is experienced and has developed a proprietary deal flow. Secondary investments are made in funds with significant sums already invested, eliminating the risk of investing in a blind pool. Secondary investments offer acceleration of returns, since portfolio companies are more mature and closer to exits (see chart, this page). Before investing in a secondary fund, you should know how they operate. Secondary buyers base their analysis on a particular fund in part on performance of the fund the interim IRR and the cash-on-cash multiple achieved. Secondary buyers also go through a deep analysis of each underlying company. This lets them predict the year of exit and the expected
26
Years
Source: Fondinvest Capital
amount of exit. Buyers also must determine the quality and experience of the fund management team, examining the profiles of all of the professionals, along with their capacity to work together. You should look for secondary buyers that have the following qualities: demonstrated expertise; a systematic approach to evaluating underlying companies; experience in a large number of transactions; experience in having secured its secondary transactions with a high degree of confidentiality; the ability to deliver proposals quickly; flexibility in negotiating with the seller. The general partner of a fund almost always has the right to approve of the buyer of a limited partnership interest. The GP typically prefers a buyer that down the road has the potential to commit to additional funds raised by the firm. In some cases, the GP may have negotiated the right to buy an
interest in its own fund before any other potential buyers are given a chance.
will want to sell their fund interests, if only to recycle the proceeds into more promising funds. In addition, European banks have come under more regulatory pressure to ease their exposure to private equity.
About the author: Charles Soulignac is CEO of Fondinvest capital, a Paris-based manager of funds of funds. He has been a member of the EVCA board of directors and investor relations committee. Reach him at [email protected].
27
1990
Landmark Partners kicks off the decade by raising $93.2 million for its debut secondary offering, the first of 11 funds that the firm has gone on to assemble.
1992
In a transaction that put secondary deals on the map, Landmark Partners agrees to purchase $125 million of LBO fund interests from Westinghouse Credit Corp.
1995
Secondary fund-raising for the first time tops the $1 billion mark.
1991
Paul Capital Partners bursts into the secondary business after acquiring Hillman Ventures Inc.s $85 million venture portfolio.
1994
Lexington Partners, then the New York affiliate of Landmark Partners, becomes an independent firm. Today, Lexington is among the largest managers of secondary funds.
$1018 $753 $506 $416 $111 $145 $51 $389 $100 $879 $465 434 $455 $998 $579
1990
1991
1992
1993
1994
1995
1996
Includes only secondary sales of fund interests **Excludes money raised for secondary investing by managers of unds of funds; also excludes money available for secondary investing by firms that don't raise institutional funds.
28
2003 2000
In what was then the largest ever purchase of U.S. fund interests, Lexington Partners and Hamilton Lane Advisors Inc. buy a portion of Chase Capital Partners portfolio, with a net asset value of roughly $500 million.
$4436
Secondary sales of fund interests sets record, thanks to diverstitures by Deutsche Bank, UBS and others.
$4610
2001
Secondary fundraising registers an all time high, with nine firms collectively raising $4.3 billion for their funds.
$3300
1998
Goldman Sachs & Co. enters the secondary business, raising $440 million for its debut offering.
$3083 $2348
$2999
$2424 $2350
2002
$2278
Coller Capital raises $1917 largest secondary fund to date, with $2.5 billion in commitments.
$1647 $1494
$1917
1997
1998
1999
2000
2001
2002
2003
29
Secondary Buyers
Firm Listings
Key Personnel
1211 Ave. of the Americas, Suite 4300, New York, NY 10036 Phone: (212) 757-2700 | Fax: (212) 757-0835 www.abbottcapital.com | [email protected]
Key Personnel
Mr. Dominique Peninon, Managing Partner [email protected] Ms. Agnes Nahum, Partner [email protected] Mr. Philippe Poggioli, Partner [email protected]
OVERVIEW
Year Founded 1999
Mr. Thaddeus I. Gray, Managing Director [email protected] Mr. Jonathan D. Roth, Managing Director [email protected] Ms. Kathryn J. Stokel, Managing Director [email protected]
INVESTMENT CRITERIA
Participation in Syndicates No Interest Sought
OVERVIEW
Year Founded 1986 Professionals Worldwide 30 Secondary Assets Under Management $300 million Capital Invested in 2002 $20 million Capital Invested in 2003 $80 million
One N. Wacker Drive, Suite 2200, Chicago, IL 60606 Phone: (312) 553-7890 | Fax: (312) 553-7891 www.adamsstreetpartners.com | [email protected]
Branch Offices
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
20 Grosvenor Place, London, SW1X 7HN United Kingdom Phone: +44 207 823 0640 | Fax: +44 207 823 0659
Key Personnel
73, Ave. des Champs-Elysees, Paris, 75008 France Phone: +33-1-5643-6100 | Fax: +33-1-5643-6101 www.access-capital-partners.com | [email protected]
Branch Offices
Mr. Ronan Cunningham (London Office) [email protected] Mr. Oliver Gardey, Partner (London Office) [email protected] Mr. Gregory Garrett, Partner, (Chicago Office) [email protected] Mr. Jason Gull, Partner, (Chicago Office) [email protected]
OVERVIEW
Year Founded 1972 Professionals Worldwide 72 Secondary Assets Under Management $400 million Capital Invested in 2002 $68.7 million Capital Invested in 2003 $83.0 million
P.O. Box 431, 13-15 Victoria Road, St Peter Port Guernsey, GY 132D Channel Island Phone: +44 1481 713 843 | Fax: +44 1481 715 219
31
2004 Adams Street Partnership Fund Program* Size $921.75 million Year Closed 2004 Adams Street Global Opportunities Secondary Fund Size $210 million Year Closed 2004
Giselastrasse 4, Munich, 80802 Germany Phone: +49 89 3800 18700 | Fax: +49 89 3800 19436 www.allianz.com | [email protected]
Key Personnel
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $100 million Participation in Syndicates Yes Interest Sought
Ms. Wanching Ang, Managing Director [email protected] Mr. James James, Managing Director [email protected]
OVERVIEW
Year Founded 1998 Professionals Worldwide 20 Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
599 Lexington Ave., 25th Floor, New York, NY 10022 Phone: (646) 735-0520 | Fax: (646) 735-0797 [email protected]
Key Personnel
Jachthavenweg 118, Amsterdam, 1081 KJ Netherlands Phone: +31 20 540 7575 | Fax: +31 20 540 7505
Branch Offices
Mr. Steven Costabile, CFA, Managing Director [email protected] Mr. Rory Chang, Vice President [email protected]
600 Fifth Ave., 17th Floor, New York, NY 10020 Phone: (212) 332-6240 | Fax: (212) 332-6241
Key Personnel
OVERVIEW
Secondary Assets Under Management $100 million Capital Invested in 2002 $5 million Capital Invested in 2003 $10 million
Mr. Tjarko Hektor, Partner, Head of Secondary Investments [email protected] Mr. Niels Kok, Senior Investment Manager [email protected]
OVERVIEW
Year Founded 1999 Professionals Worldwide 45 Secondary Assets Under Management $1.8 billion Capital Invested in 2003 $750 million
INVESTMENT CRITERIA
Minimum Investment $2 million Maximum Investment $25 million Participation in Syndicates Yes Interest Sought
INVESTMENT CRITERIA
Minimum Investment $5 million Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
32
ARCIS Group
Main Office
Kungsgatan 7, Stockholm SE-111 43 Sweden Phone: +46 8 545 290 60 | Fax: +46 8 545 290 69
Key Personnel
14, rue de Bassano, Paris, 75116 France Phone: +33 1 4723 8862 | Fax: +33 1 4723 8855 www.arcisgroup.com | [email protected]
Branch Offices
33 Cavendish Square, London, W1G 0BQ United Kingdom Phone: +44 20 7290 5080 | Fax: +44 20 7290 5081 509 Madison Ave., Suite 812, New York, NY 10022 Phone: (212) 838-5577 | Fax: (212) 838-8858
Key Personnel
Mr. Marcel Giacometti, President [email protected] Mr. Stephen Wesson, Managing Director [email protected] Mr. Richard Lichter, Managing Director [email protected]
OVERVIEW
Year Founded 1989 Professionals Worldwide 44 Secondary Assets Under Management $250 million
Mr. Arnaud Isnard, Managing Partner [email protected] Mr. Henri Isnard, Managing Partner [email protected] Mr. Mark Burch, Partner [email protected] Mr. Pierre Nollet, Partner [email protected]
Auda Secondary Fund L.P. Size TBA Year Closed Currently Fundraising
INVESTMENT CRITERIA
Minimum Investment $2 million individual, $5 million institutional Maximum Investment N/A Participation in Syndicates No Interest Sought
OVERVIEW
Year Founded 1993 Professionals Worldwide 10 Secondary Assets Under Management $350 milion
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $100 million Interest Sought
Venture Funds LBO Funds Mezzanine Funds U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
20, Place Vendme, Paris, 75001 France Phone: +33 1 4445 9270 | Fax: +33 1 4445 9303 www.axaprivateequity.com
Branch Offices
7 Newgate St., London, EC1A 7NX United Kingdom Phone: +44 20 7003 1354 | Fax: +44 20 7575 8309 1370 Ave. of the Americas, New York, NY 10019 Phone: (212) 641-8604 | Fax: (212) 641-8616/17 Stifstrasse 30, Frankfurt am Main, 60313 Germany Phone: +49 69 90025 16900 | Fax: +49 69 90025 15955
Key Personnel
745 Fifth Ave., 29th Floor, New York, NY 10151 Phone: (212) 863-2300 | Fax: (212) 593-2974 www.auda.net | [email protected]
Branch Offices
Rua Pedrosa Alvarenga, 1221, 1 andar, Sao Paolo, 04531-012 Brazil Phone: +55 11 3071 0346 | Fax: +55 11 3071 1420 Av. Leandro N. Alem 584 Piso 12, Buenos Aires, C1001AAN Argentina Phone: +54 11 4312 6707 | Fax: +54 11 4311 2211 4 Park Place (St. James), London, SW1A 1LP United Kingdom Phone: +44 207 898 9008 | Fax: +44 207 898 9249 Harald Quandt Haus, Am Pilgerrain 17, Bad Homburg, 61352 Germany Phone: +49 6172 402 801 | Fax: +49 6172 402 809
Mr. Vincent Gombault, Member of the Executive Committee, Head of Fund of Funds [email protected] Mr. Christophe Florin, Managing Director [email protected] Mr. Daniel Benin, Director [email protected] Mr. Franck Nguyen, Director [email protected]
34
Mr. Benoit Verbrugghe, Director [email protected] Mr. Marc Lasserre, Senior Investment Manager [email protected] Mr. Stphane Chevrier, Investment Manager [email protected] Mr. Xavier Belloir, Investment Manager [email protected] Mr. Barthlmy Pallu de Beaupuy, Investment Manager [email protected]
7667 Folsom Blvd., Suite 2500, Sacramento, CA 95826 Phone: (916) 229-3697 | Fax: (916) 229-3790 www.calstrs.com | [email protected]
Key Personnel
OVERVIEW
Year Founded 1998 Professionals Worldwide 20 Secondary Assets Under Management $700 million
Mr. Richard Rose, Principal Investment Officer [email protected] Mr. Real Desrochers, Director of Alternative Investments [email protected]
OVERVIEW
Year Founded 1913 Professionals Worldwide 12
AXA Secondary Fund I Size $220 million Year Closed 1998 AXA Secondary Fund II Size $480 million Year Closed 2001
INVESTMENT CRITERIA
Minimum Investment $5 million Maximum Investment $75 million Participation in Syndicates Interest Sought
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $250 million Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
One Queen St., East, Suite 2700, Toronto, M5C 2W5 Canada Phone: (416) 868-4705 | Fax: (416) 868-4083 www.cppib.ca
Key Personnel
400 P. St., Sacramento, CA 95814 Phone: (916) 326-3400 | Fax: (916) 326-3344 www.calpers.ca.gov
Key Personnel
1926 Arch St., Philadelphia, PA 19103 Phone: (215) 246-3000 | Fax: (215) 246-3068 www.cmsco.com
Key Personnel
OVERVIEW
Year Founded 1990
OVERVIEW
Year Founded 1969 Professionals Worldwide 120
35
Interest Sought
Key Personnel
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Mr. Stephen H. Can, Managing Director & Fund Head [email protected] Mr. James L. Paradise, Managing Director [email protected] Mr. Peter Song, Vice President [email protected]
OVERVIEW
Year Founded 2000 Professionals Worldwide 14 Secondary Assets Under Management $2.8 billion
Coller Capital
Main Office
33 Cavendish Square, London, W1G OTT United Kingdom Phone: +44 20 7631 8500 | Fax: +44 20 7631 8555 www.collercapital.com | [email protected]
Branch Offices
CSFB Strategic Partners II, L.P. Size $1.625 billion Year Closed 2003 CSFB Strategic Partners II RE, L.P. Size $300 million Year Closed 2003
410 Park Ave., Suite 530, New York, NY 10022 Phone: (212) 644-8500 | Fax: (212) 644-9133
Key Personnel
Mr. Jeremy Coller, Chief Executive Officer [email protected] Mr. Daniel DuPont, Partner [email protected] Ms. Susan Flynn, Partner [email protected] Mr. Axel Hansing, Partner [email protected] Mr. Tim Jones, Partner [email protected] Mr. Hiromichi Mizuno, Partner [email protected] Mr. Denis Mortier, Partner [email protected] Mr. Frank Morgan, Partner [email protected] Mr. Erwin Roex, Partner [email protected]
INVESTMENT CRITERIA
Minimum Investment $.15 million Maximum Investment $500 million Participation in Syndicates Yes Interest Sought
LBO Funds Mezzanine Funds Real Estate Funds U.S. Funds Non-U.S. Funds
OVERVIEW
Year Founded 1990 Professionals Worldwide 46 Secondary Assets Under Management $3.5 billion
1717 Main St., Suite 2500, Dallas, TX 75201 Phone: (214) 698-2777 | Fax: (214) 698-2778 www.crossroadsgroup.com | [email protected]
Branch Offices
399 Park Ave., 9th Floor, New York, NY 10022 Phone: (212) 526-7000
Key Personnel
11 Madison Ave., 16th Floor, New York, NY 10010 Phone: (212) 538-7680 | Fax: (212) 538-0434
Mr. Brad K. Heppner, Chairman & CEO [email protected] Mr. Anthony D. Tutrone, Managing Director [email protected] Mr. John P. Buser, Chief Operating Officer & CFO [email protected] Mr. Joseph A. Malick, General Counsel & Managing Director [email protected]
>Continued on page 41
36
Mr. Brien P. Smith, Director [email protected] Mr. Christopher R. Frattaroli, Director [email protected]
Interest Sought
OVERVIEW
Year Founded 1981 Professionals Worldwide 60 Secondary Assets Under Management $444 million Capital Invested in 2003 $70 million
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds Secondaries
Lehman Crossroads Private Equity Asset Allocation Fund XVII, L.P.* Size $500 million
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $1 billion Participation in Syndicates Yes Interest Sought
143, Boulevard Haussmann, 3rd Floor, Paris, 75008 France Phone: +33 1 44 56 59 96 | Fax: +33 1 44 56 59 92 www.finama-pe.fr | [email protected]
Key Personnel
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Mr. Pierre-Michel Delglise, Chief Executive Officer [email protected] Mr. Didier Levy-Rueff, Managing Partner [email protected] Mr. Marc-Antoine Voisard, Investment Manager [email protected] Mr. Lionel Bergeron, Investment Manager [email protected] Mr. Grgory Carite, Analyst [email protected] Mr. Romain Lobstein, Analyst [email protected] Mr. Frdric Dosjoub, Analyst [email protected]
OVERVIEW
One Righter Parkway, Suite 3200, Wilmington, DE 19803 Phone: (302) 477-6000 | Fax: (302) 477-6010
Key Personnel Year Founded 1988 Professionals Worldwide 16 Secondary Assets Under Management $125 million
Mr. Carmen J. Gigliotti, Senior Portfolio Manager [email protected] Mr. Michael T. Pilson, Portfolio Manager [email protected] Ms. Holly A. Lissner, Portfolio Manager [email protected] Mr. Brian S. Schneider, Senior Portfolio Manager [email protected] Mr. John W. Vander Vort, Portfolio Manager [email protected] Mr. Daryl B. Brown, Portfolio Analyst [email protected] Mr. Howard F. Searing, Portfolio Analyst [email protected] Mr. Eric A. Wilcomes, Portfolio Analyst [email protected]
Quartilum II Size $150 million (target size) Year Closed Currently raising Quartilum Secondary II Size $50 million (target size) Year Closed Currently raising Quartilum I Size $150 million Year Closed 2000
INVESTMENT CRITERIA
Participation in Syndicates Yes Interest Sought
OVERVIEW
Year Founded 1989 Professionals Worldwide 8
41
FONDINVEST CAPITAL
Main Office
33 rue de La Baume, 2nd Floor, Paris, 75008 France Phone: +33 1 53 36 48 00 | Fax: +33 1 58 36 48 28 www.fondinvest.com | [email protected]
Key Personnel
32 Old Slip, 21st Floor, New York, NY 10005 Phone: (212) 855-0478 | Fax: (212) 346-2603 [email protected]
Key Personnel
OVERVIEW
Year Founded 1994 Professionals Worldwide 15 Secondary Assets Under Management $500 million
Mr. Geoffrey G. Clark, Managing Director, Secondary Investments [email protected] Mr. J. Christopher Kojima, Managing Director, Secondary Investments [email protected]
OVERVIEW
Year Founded 1996 Professionals Worldwide 80 Secondary Assets Under Management $2.5 billion Interest Sought
Fondinvest II* Size $70 million Year Closed 1996 Fondinvest IV* Size $130 million Year Closed 1999 Fondinvest VI* Size $292 million Year Closed 2002
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
INVESTMENT CRITERIA
Minimum Investment $0.5 million Participation in Syndicates No Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
2-5 Old Bond St., London, W1S 4PD United Kingdom Phone: +44 20 7647 1400 | Fax: +44 20 7647 1440 www.greenparkcapital.com | [email protected]
Key Personnel
Ms. Marleen Groen, CEO [email protected] Mr. Joe Topley, Investment Director [email protected] Ms. Joanna Jordan, Operations/Investor Relations Director [email protected] Mr. Andrew French, Finance Director [email protected]
OVERVIEW
Year Founded 2000 Professionals Worldwide 9 Secondary Assets Under Management $250 million
767 Fifth Ave., 16th Floor, New York, NY 10153 Phone: (212) 418-6100 | Fax: (212) 418-3644
Key Personnel
OVERVIEW
Year Founded 1980 Professionals Worldwide 14
Greenpark International Investors I, L.P. (& parallel funds) Size $200 million Year Closed 2003
42
INVESTMENT CRITERIA
Participation in Syndicates Yes Interest Sought
OVERVIEW
Year Founded 1991 Professionals Worldwide 50
Venture Funds LBO Funds Mezzanine Funds U.S. Funds Non-U.S. Funds
INVESTMENT CRITERIA
Minimum Investment $1 million Participation in Syndicates Yes Interest Sought
GSB Building, One Belmont Ave., 9th Floor, Bala Cynwyd, PA 19004 Phone: (610) 934-2222 | Fax: (610) 617-9853 www.hamiltonlane.com | [email protected]
Branch Offices
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
2nd Floor, Berkeley Square House, Berkeley Square London, W1J 6BD United Kingdom Phone: +44 20 7887 1460 | Fax: +44 20 7887 1461
Key Personnel
Mr. Mario L. Giannini, CEO [email protected] Mr. Erik R. Hirsch, Chief Investment Officer [email protected]
One Financial Center, 44th Floor, Boston, MA 02111 Phone: (617) 348-3707 | Fax: (617) 350-0305 www.harbourvest.com
Greenpark Capital
43
Branch Offices
HarbourVest Partners (U.K.) Limited, Berkeley Square House, 8th Floor Berkeley Square, London, W1J 6DB United Kingdom Phone: +44 (0)20 7399 9820 | Fax: +44 (0)20 7399 9840 HarbourVest Partners (Asia) Limited, Citibank Tower, Suite 1207 3 Garden Road, Central, Hong Kong Phone: +852 2525 2214 | Fax: +852 2525 2241
Key Personnel
Harvest Fund
Main Office
96 Rothschild Blvd., Tel Aviv, 65224 Israel Phone: +972 3 710 8282 | Fax: +972 3 710 8210 www.evergreen.co.il | [email protected]
Key Personnel
Mr. John Begg, Managing Director Mr. Frederick Maynard, Managing Director Mr. Brett Gordon, Principal, (617) 348-3764 [email protected] Mr. Michael Taylor, Principal Mr. John Toomey, Vice President Mr. Brian Buenneke, Senior Associate Mr. John Fiato, Senior Associate Ms. Christina Pamberg, Vice President (HarbourVest Partners (U.K.) Limited), + 44 (0)20 7399 9820 [email protected] Mr. Jeffrey Keay, Senior Associate (HarbourVest Partners (U.K.) Limited) Mr. Philip Bilden, Managing Director (HarbourVest Partners (Asia) Limited), +852 2525 2214 [email protected]
Mr. Shmuel Shilo, Fund Manager [email protected] Mr. Yohay Gold, Partner [email protected]
OVERVIEW
Year Founded 1998 Secondary Assets Under Management $115 Capital Invested in 2002 $7 million
Harvest Fund I Size $25 million Harvest Fund II Size $90 million
OVERVIEW
Year Founded 1997, the team has been investing in secondaries
Interest Sought
since 1986
Professionals Worldwide 51 investment, 115 total Secondary Assets Under Management $4.1 billion
Venture Funds Secondary investments in Israeli or Israeli-related venture funds and direct holdings in portfolios of Israeli high-tech companies.
HarbourVest International Private Equity Partners IV - Partnership Fund* Size $2.2 billion Year Closed 2002 HarbourVest Partners VII - Venture Partnership Fund* Size $ 2.0 billion Year Closed 2004 HarbourVest Partners VII - Buyout Partnership Fund* Size $ 2.0 billion Year Closed 2004 Dover Street V Size $515 million Year Closed 2002
505 Montgomery St., Suite 2100, San Francisco, CA 94111 Phone: (415) 986-7733 | Fax: (415) 986-7755 [email protected]
Key Personnel
OVERVIEW
Year Founded 1983 Professionals Worldwide 9
INVESTMENT CRITERIA
Participation in Syndicates Yes Interest Sought
INVESTMENT CRITERIA
Minimum Investment $3 million Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
44
Branch Offices
Finsbury Dials, 20 Finsbury St., London, EC2Y 9AQ United Kingdom Phone: + 44 20 7742 3754 | Fax: +44 20 7742 3563
Key Personnel
1166 Ave. of the Americas, 27th Floor, New York, NY 10036 Phone: (212) 278-9000 | Fax: (212) 278-9684 www.invescoprivatecapital.com
Branch Offices
30 Finsbury Square, London, EC2A 1AG United Kingdom Phone: +44 20 7065 4000 4350 S. Monaco St., Denver, CO 90237 Phone: (720) 624-6300 | Fax: (720) 720 624-1913/1914 525 University Ave., Suite 600, Palo Alto, CA 94301 Phone: (650) 325-3600
Key Personnel
Mr. Ted Beit, Portfolio Manager [email protected] Mr. Jarrod Fong, Portfolio Manager [email protected] Ms. Dana Haimoff, Portfolio Manager (London) [email protected]
OVERVIEW
Year Founded 1980 Professionals Worldwide 30
Mr. Damian Witkowski, Senior Associate [email protected] Mr. Steve Hahn, Associate [email protected]
INVESTMENT CRITERIA
Minimum Investment $5 million Maximum Investment $100 million Interest Sought
OVERVIEW
Year Founded 1982 Professionals Worldwide 43 Secondary Assets Under Management $15 million
INVESCO Partnership Fund III* Size $306 million Year Closed 2000
10 Mill Pond Lane, Simsbury, CT 6070 Phone: (860) 651-9760 | Fax: (860) 651-8890 www.landmarkpartners.com | [email protected]
Branch Offices
INVESTMENT CRITERIA
Minimum Investment $5 million Maximum Investment $75 million Participation in Syndicates Yes Interest Sought
53 Davies St., London, W1K 5JH United Kingdom Phone: +44 20 7152 6535 | Fax: +44 20 7152 6536
Key Personnel
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds Turnarounds
Mr. Francisco L. Borges, Managing Partner, President & CEO [email protected] Mr. James McConnell, Partner [email protected] Mr. Anthony J. Roscigno, Partner [email protected] Mr. Chad S. Alfeld, Partner [email protected] Mr. Scott Conners, Partner [email protected] Mr. R. Paul Mehlman, Partner [email protected] Mr. Timothy Haviland, COO [email protected] Mr. Robert J. Shanfield, Partner [email protected]
OVERVIEW
Year Founded 1984 Professionals Worldwide 40 Secondary Assets Under Management $3.8 billion
522 Fifth Ave., New York, NY 10036 Phone: (212) 837-1925 | Fax: (212) 837-1301 www.jpmorganfleming.com/am
45
Landmark Equity Fund X Size $583 million Year Closed 2001 Landmark Real Estate Fund IV Size $270 million Year Closed 2002
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $1 billion Interest Sought
INVESTMENT CRITERIA
Minimum Investment $0.25 million Maximum Investment $1 billion Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Churerstrasse 122, Pfaeffikon, CH - 8808 Switzerland Phone: +41 55 415 94 15 | Fax: +41 55 415 92 00 www.lgtcp.com | [email protected]
Branch Offices
LGT Capital Partners (USA) Inc., 245 Park Ave., 39th Floor New York, NY 10167
Key Personnel
660 Madison Ave., 23rd Floor, New York, NY 10021 Phone: (212) 754-0411 | Fax: (212) 754-1494 www.lexingtonpartners.com | [email protected]
Branch Offices
Mr. Ivan Vercoutere, Partner [email protected] Mr. Wolfgang Mller, Vice President [email protected]
OVERVIEW
Year Founded 1997 Professionals Worldwide 53 Secondary Assets Under Management $500 million Capital Invested in 2002 $100 million Capital Invested in 2003 $150 million
3000 Sand Hill Road, Building 1, Suite 220, Menlo Park, CA 94025 Phone: (650) 561-9600 | Fax: (650) 561-9696 111 Huntington Ave., Suite 3020, Boston, MA 2199 Phone: (617) 247-7010 | Fax: (617) 247-7050 42 Berkeley Square, London, W1L 5AW United Kingdom Phone: +44 20 7318 0888 | Fax: +44 20 7318 0889
Key Personnel
INVESTMENT CRITERIA
Minimum Investment $5 million Maximum Investment $300 million Participation in Syndicates Yes Interest Sought
Mr. Brent R. Nicklas, Managing General Partner (New York, NY) Mr. Nick Harris, General Partner (Menlo Park, CA) Mr. Marshall W. Parke, General Partner (London) Mr. Lee J. Tesconi, General Partner (Boston, MA) Mr. Wilson S. Warren, Principal (New York, NY) Mr. Charles R. Grant, Principal (New York, NY) Mr. Philip S. Durden, (Menlo Park, CA) Mr. Pl B. Ristvedt, Vice President (London)
OVERVIEW
Year Founded 1989 Professionals Worldwide 32 Secondary Assets Under Management $5.8 billion Capital Invested in 2002 $600 million Capital Invested in 2003 $800 million
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
46
Liquid Realty Partners II, LLC Size $150 million Year Closed 2004
44 Montgomery St., Suite 3705, San Francisco, CA 94104 Phone: (415) 296-9500 | Fax: (415) 296-9567 www.liquidrealty.com | [email protected]
Branch Offices
INVESTMENT CRITERIA
Minimum Investment $5 million Participation in Syndicates Yes Interest Sought
115 East 57th St., 11th Floor, New York, NY 10022 Phone: (212) 421-0797 | Fax: (212) 308-4130
Key Personnel
Mr. Scott Landress, Managing Partner [email protected] Mr. Mark Berman, Managing Partner [email protected]
Real Estate Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds Mezzanine Funds (Real Estate)
OVERVIEW
Year Founded 2002 Professionals Worldwide 5 Secondary Assets Under Management $175 million Main Office
Liquid Realty Partners I, LLC Size $25 million Year Closed 2003
W. Capital Partners
47
Branch Offices
Key Personnel
10529 Dacre Place, Littleton, CO 80124 Phone: (303) 799-1006 | Fax: (303) 799-1005
Key Personnel
Mr. Brian M. Smith, General Partner [email protected] Mr. Edgar J. Pfohl, General Partner [email protected]
OVERVIEW
Year Founded 1999 Professionals Worldwide 4 Secondary Assets Under Management $110 million Capital Invested in 2002 $17.5 million Capital Invested in 2003 $21 million
Mr. David Braman, Senior Partner [email protected] Mr. Jay Pierrepont, Partner [email protected] Mr. B. Greg Bohannon, Partner [email protected] Mr. Ian G. Deas, Partner [email protected] Mr. Gary E. Hiatt, Partner [email protected] Ms. Susan Long McAndrews, Partner [email protected]
OVERVIEW
Year Founded 1982 Professionals Worldwide 62 Secondary Assets Under Management $1.3 billion
Montauk Partners II, L.P. Size $76.6 million Year Closed 2000
INVESTMENT CRITERIA
Minimum Investment $0.1 million Maximum Investment $30 million Participation in Syndicates Yes Interest Sought
Pantheon Global Secondary Fund Size $418 million Year Closed 2000 Pantheon USA Fund IV* Size $799.9 million Year Closed 2001 Pantheon Asia Fund III* Size $100 million Year Closed 2002 Pantheon Europe Fund III* Size $500 million Year Closed 2002 Pantheon USA Fund V* Size $313.8 million Year Closed 2003
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
INVESTMENT CRITERIA
TransAmerica Center, 600 Montgomery St., 23rd Floor San Francisco, CA 94111 Phone: (415) 249-6200 | Fax: (415) 249-6299 www.pantheonventures.com | [email protected]
Branch Offices
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
Norfolk House, 31 St. James Square London, SW1Y 4JR United Kingdom Phone: +44 20 7484 6200 | Fax: +44 20 7484 6201 480 Avenue Louise, Brussels, 1050 Belgium Phone: +32 2 290 2020 | Fax: +32 2 290 2021 Two Exchange Square, 8 Connaught Place, Suite 1606, 16th Floor Central, Hong Kong, China Phone: +852 2810 8063 | Fax: +852 2526 0218
Partners Group
Main Office
Zugerstrasse 57, Baar-Zug, 6341 Switzerland Phone: +41 41 768 85 85 | Fax: +41 41 768 85 57 www.partnersgroup.net | [email protected]
48
Branch Offices
Key Personnel
126 East 56th St., 11th Floor, New York, NY 10022 Phone: (212) 763-4700 | Fax: (212) 763-4701 Elizabeth House, St. Peter Port, Guernsey, Channel Islands Phone: +44 1481 711 690 | Fax: +44 1481 730 947
Key Personnel
Mr. Albert Clerc, Managing Director Mr. Vincent Dee, CFA, Associate [email protected]
OVERVIEW
Year Founded 1991 Professionals Worldwide 57
Mr. Domenico Truncellito, Head Communications [email protected] Mr. Urs Wietlisbach, Chairman [email protected]
INVESTMENT CRITERIA
Participation in Syndicates No Interest Sought
OVERVIEW
Year Founded 1996 Professionals Worldwide 104 Secondary Assets Under Management $1.15 billion
Partners Group Secondary, L.P. Size 172 million Year Closed Still Open Princess Private Equity Holding Limited* Size $700 million Year Closed 1999 Pearl Holding Limited* Size 660 million Year Closed 2001 P3 Certificate* Size 340 Year Closed 2000 Partners Group Europe, L.P.* Size 253 million Year Closed 2004 CSA Private Size CHF 200 million Year Closed 2001 Equity*
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds Pathway takes an opportunistic approach to partnership selection.
50 California St., Suite 3000, San Francisco, CA 94111 Phone: (415) 283-4300 | Fax: (415) 283-4301 www.paulcap.com | [email protected]
Branch Offices
140 East 45th St., 44th Floor, New York, NY 10017 Phone: (646) 264-1100 | Fax: (646) 264-1101 28, avenue de Messine, 2nd Floor, Paris, 75008 France Phone: +33 1 5353 0606 | Fax: +33 1 5353 0607 Picassoplatz 8, Basel, 4052 Switzerland Phone: +41 61 283 4460 | Fax: +41 61 283 4461 8 Clifford St., 3rd Floor, London, W1S 2LQ United Kingdom Phone: +44 20 7851 6000 | Fax: +44 20 7734 8167
Key Personnel
INVESTMENT CRITERIA
Interest Sought
5 Park Plaza, Suite 300, Irvine, CA 92614 Phone: (949) 622-1000 | Fax: (949) 622-1010 www.pathwaycapital.com | [email protected]
Branch Offices
Building 3, Chiswick Park, 566 Chiswick High Road London, W45 YA United Kingdom Phone: +44 208 899 6099 | Fax: +44 208 899 6299
Mr. David de Weese, Partner [email protected] Mr. David Park, Partner [email protected] Mr. Guy Rico, Partner [email protected] Mr. Bryon Sheets, Partner [email protected] Mr. David York, Partner [email protected] Ms. Lisa Edgar, Principal [email protected] Mr. Michel Raoult, Principal [email protected] Mr. Brian Sullivan, Principal [email protected]
49
Ms. Melanie Taylor, Business Development Manager [email protected] Mr. Simon Guenzl, Principal [email protected]
OVERVIEW
Year Founded 1973 Professionals Worldwide 10 Secondary Assets Under Management $100 million
OVERVIEW
Year Founded 1991 Professionals Worldwide 27 Secondary Assets Under Management $3.2 billion
INVESTMENT CRITERIA
Minimum Investment $0.5 million Maximum Investment $10 million Participation in Syndicates Yes Interest Sought
Paul Capital Partners VII, L.P. Size $808 million Year Closed 2001 Paul Capital Top Tier Investments II, L.P.* Size $478 million Year Closed 2003
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
INVESTMENT CRITERIA
Minimum Investment $10 million Maximum Investment $500 million Participation in Syndicates Yes Interest Sought Main Office
Pomona Capital
780 Third Ave., New York, NY 10017 Phone: (212) 593-3639 | Fax: (212) 593-3987 www.pomonacapital.com | [email protected]
Branch Offices
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
16 Hanover Square, London, W1R 9AJ United Kingdom Phone: +44 20 7408 9433 | Fax: +44 20 7408 9434
Key Personnel
Mr. Thomas A. Bradley, Partner [email protected] Mr. Brian S. Wright, Partner & Director/Europe [email protected]
OVERVIEW
Year Founded 1994 Professionals Worldwide 17 Secondary Assets Under Management $1 billion
111 Huntington Ave., Suite 2850, Boston, MA 02199-7610 Phone: (617) 399-9245 | Fax: (617) 267-5565 www.permalcapital.com | [email protected]
Branch Offices
900 Third Ave., 28th floor, New York, NY 10022 Phone: (212) 418-6548 | Fax: (212) 418-6510
Key Personnel
INVESTMENT CRITERIA
Minimum Investment $1 million Interest Sought
Mr. C. Redington (Red) Barrett, III, President & Chief Executive Officer [email protected] Mr. Benjamin E. Marino, Vice President [email protected] Mr. Robert DiGeronimo, Vice President [email protected] Mr. Anthony M. Waters, Associate [email protected]
Venture Funds LBO Funds Mezzanine Funds U.S. Funds Non-U.S. Funds
50
Key Personnel
505 Park Ave., 4th Floor, New York, NY 10022 Phone: (212) 750-1228 | Fax: (212) 750-2685 www.peifunds.com | [email protected]
Branch Offices
Mr. Zachary Venegas, Partner Mr. Kabir Arghandiwal, Partner Mr. Scott Ogur, CFA, Partner [email protected]
OVERVIEW
Year Founded 2003 Professionals Worldwide 5
601 Montgomery, Suite 700, San Francisco, CA 94111 Phone: (415) 782-1414 | Fax: (415) 782-1415 Jitsugehsukan Kojimachi Building, 1-3-7 Kojimachi Chiyoda-ku Tokyo 102-0083 Japan Phone: +81 3 5210 3601 | Fax: +81 3 5210 3160
Key Personnel
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $50 million
Mr. Chuck Stetson, Managing Director [email protected] Mr. David B. Parshall, Managing Director [email protected] Mr. Gunnar B. Fremuth, Managing Director [email protected]
OVERVIEW
Year Founded 1992 Professionals Worldwide 9 Secondary Assets Under Management $490 million Interest Sought
350 Fifth Ave., Empire State Building, Suite 5714, New York, NY 10118 Phone: (212) 947-8610 | Fax: (212) 947-8641 [email protected]
Key Personnel
Venture Funds LBO Funds Mezzanine Funds Stakes in Private Companies U.S. Funds
OVERVIEW
Year Founded 1996 Professionals Worldwide 3
INVESTMENT CRITERIA
Interest Sought
Venture Funds LBO Funds Mezzanine Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
30 Van Ness Ave., Suite 3000, San Francisco, CA 91402 Phone: (415) 487-7003 | Fax: (415) 487-7014
Key Personnel
OVERVIEW
Year Founded 1986
509 Madison Ave., Suite 812, New York, NY 10022 Phone: (212) 838-5577 | Fax: (212) 838-7614 www.vcfa.com | [email protected]
Branch Offices
Capricorn Tower, 9th Floor, Sheikh Zayed Road P.O. Box 75135, Dubai, United Arab Emirates Phone: +9714 403 7100 | Fax: +9714 332-9919 www.scimitarventures.com
Branch Offices
100 East Huron St., Suite 3704, Chicago, IL 60611 Phone: (312) 951-9655 | Fax: 100 Pine St., Suite 2820, San Francisco, CA 94111 Phone: (415) 296-0660 | Fax: (415) 296-0990
Key Personnel
6 Landmark Square, Suite 400, Stamford, CT 06901 Phone: (203) 359-5691 | Fax: (203) 359-5891
51
Mr. Brett Byers, Managing Director [email protected] Mr. Edward Hortick, Managing Director [email protected] Mr. Steven J. Taubman, Managing Director [email protected]
Pacific Telesis Tower, One Montgomery St., San Francisco, CA 94104 Phone: (415) 364-2500 | Fax: (415) 364-2695 www.tweisel.com
Branch Offices
OVERVIEW
Year Founded 1982 Professionals Worldwide 10
Two International Place, 26th Floor, Boston, MA 2110 Phone: (617) 488-4145 | Fax: (617) 753-6342
Key Personnel
VCFA Venture Partners III, L.P. Size $100 million Year Closed 2000 IVCGA IV, L.P. Size $50.5 million Year Closed 2001
Mr. Clifford Meijer, Principal [email protected] Ms. Christy Richardson, Principal [email protected]
OVERVIEW
Year Founded 1999 Professionals Worldwide 630 Secondary Assets Under Management $140 million Capital Invested in 2002 $15 million Capital Invested in 2003 $20 million
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $50 million Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Thomas Weisel Global Growth Partners II(S), L.P. Size $130 million Year Closed 2004
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $50 million Participation in Syndicates Yes Interest Sought
Venture Funds Mezzanine Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Willowridge Incorporated
Main Office
88 Main St., P.O. Box 131, Peapack, NJ 7977 Phone: (908) 532-0020 | Fax: (908) 532-0040 [email protected]
Key Personnel
25 East 86th St., New York, NY 10028-0553 Phone: (212) 369-4700 | Fax: (212) 369-5661 www.willowridgeinc.com | [email protected]
Key Personnel
OVERVIEW
Year Founded 1993 Professionals Worldwide 6 Interest Sought
Mr. Jerrold Newman, (212) 369-2888 [email protected] Mr. Timothy Brody, (212) 369-8922 [email protected] Ms. Luisa Hunnewell, (212) 369-1220 [email protected] Mr. James OMara, (212) 369-3211 [email protected]
52
OVERVIEW
Year Founded 1995 Professionals Worldwide 4 Secondary Assets Under Management $100 million Capital Invested in 2002 $9.2 million Capital Invested in 2003 $13.8 million
Mr. Neville Page, Managing Director [email protected] Mr. Ovidio Iglesias, Managing Director [email protected]
OVERVIEW
Year Founded 1996 Professionals Worldwide 27 Secondary Assets Under Management $15 million Capital Invested in 2002 $1 million Capital Invested in 2003 $14 million
INVESTMENT CRITERIA
Minimum Investment $0.5 million Maximum Investment $15 million Participation in Syndicates Yes Interest Sought
WPMF V plus some separate accounts* Size $300 million Year Closed 2002
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $50 million Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds Stakes in Private Companies U.S. Funds Non-U.S. Funds
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds U.S. Funds Non-U.S. Funds
1299 Ocean Ave., Suite 700, Santa Monica, CA 90401 Phone: (310) 451-3051 | Fax: (310) 458-0479 www.wilshirepmg.com
Branch Offices
210 Sixth Ave., Suite 3720, Pittsburgh, PA 15222 Phone: (412) 434-1580 | Fax: (412) 434-5249 Prins Hendriklaan 43, 1075 BA, Amsterdam, The Netherlands Phone: +31 20 305 7530 | Fax: +31 20 305 7539 Level 6, AMP, 1 Hobart Place, Canberra, ACT 2601 Australia Phone: +61 2 6279 6000 | Fax: +61 2 6230 5144 101 East 52nd St., 20th Floor, New York, NY 10022 Phone: (212) 308-9500 | Fax: (212) 308-3930
Key Personnel
One Lincoln St., Boston, MA 2110 Phone: (617) 664-2934 | Fax: (617) 664-2939 www.ssga.com/about_ssga/wilton_asset_mgmt.html
Branch Offices
Mr. Tom Lynch, Managing Director [email protected] Mr. Jeff Ennis, Managing Director Managing Director Mr. Derek Minno, Managing Director [email protected] Mr. Dan Allen, Managing Director [email protected]
53
Intermediaries
Firm Listings
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Average Size of Secondary Deals
45 Rockefeller Plaza, Suite 2000, New York, NY 10111 Phone: (212) 332-7166 | Fax: (212) 937-3350 www.thecamelotgroup.com | [email protected]
Branch Offices
$10 million to $99 million $100 million to $499 million $500 million to $999 million
Spear Tower- One Market, 35th Floor, San Francisco, CA 94105 Phone: (415) 293-8263 | Fax: (415) 276-4769 Tower 42- International Financial Centre, Level 7 London EC2N 1HN United Kingdom Phone: ++44 207 877 0809 | Fax: +44 207 990 9100 Rue du Rhone 14, 4th Floor, CH-1204 Switzerland Phone: +41 22 819 1829 | Fax: +41 22 819 1998 Frankfurter Welle, An der Welle 4, Frankfurt D-60422 Germany Phone: +49 69 7593 8441 | Fax: +49 69 2557 7084
Key Personnel
5 Clifford St., London, W1S 2LG United Kingdom Phone: +44 20 7439 7191 | Fax: +44 20 7437 0153 www.campbell-lutyens.com
Branch Offices
230 Park Ave., 28th Floor, New York, NY 10022 Phone: (212) 223-1798
Key Personnel
Mr. Lawrence E. Penn, III, Managing Director, Head of Secondary Advisory Practice, [email protected] Mr. A. Oliver Welsch-Lehmann, Director [email protected] Ms. Angela Y. Benjamin, Executive Assistant [email protected]
OVERVIEW
Professionals Worldwide 35 Services Provided The Camelot Group is an Investment and Advisory
firm that provides independent and sophisticated advice to institutions, corporations, |partnerships, governments and individuals in the Alternative Asset and Private Equity Industries. We focus on consistent advisory practices and precise execution of transactions. Our investment and advisory practice targets acquisitions and divestitures of limited partner interests and corporate assets in the Alternative Asset and Private Equity markets. Our core services consist of acquisitions and divestitures of limited partnership interests, general partner and limited partner dispute resolution, capital-raising activities, corporate debt transactions and financial and strategic advice.
Types of Clients
Mr. Andrew Sealey, Managing Partner [email protected] Mr. John Campbell, Senior Partner [email protected] Mr. Eric Estes, Partner [email protected] Mr. Jean-Charles Charpentier, Partner [email protected] Mr. Andrew Bentley, Principal [email protected] Mr. Chris Davidsson, Principal [email protected] Mr. Jeff Couch, Principal [email protected] Mr. Pablo de la Infiesta, Principal [email protected]
OVERVIEW
Year Founded 1988 Professionals Worldwide 20 Services Provided Financial Advisory Campbell Lutyens provides specialist advice on the sale or restructuring of private equity interests. These transactions include: the disposal of portfolios of private equity funds or portfolios of direct private equity holdings; advice on the restructuring of individual funds or private equity holdings; and mergers and acquisitions of private equity managers. It also provides strategic advice to institutions on their approach to the private equity asset class. Typical transactions range in size from 20 million to 500 million.
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds
54
Types of Clients
Banks/Financial Institutions Family Offices Endowments/Foundations Government and Public Institutions Public Pension Funds Private Equity Firms Private Equity Management Teams
Average Size of Assets Managed by Clients
100 Crescent Court, Suite 500, Dallas, TX 75201 Phone: (214) 871-5400 | Fax: (214) 871-5401 www.cogent-partners.com | [email protected]
Branch Offices
$10 million to $99 million $100 million to $499 million $500 million to $999 million
Average Size of Secondary Deals
400 Madison Ave., Suite 16C, New York, NY 10017 Phone: (646) 274-4940 | Fax: (646) 274-4941
Key Personnel
$10 million to $99 million $100 million to $499 million $100 million to $499 million
Capital Dynamics
Main Office
Metallstrasse 9b, Zug, CH-6304 Switzerland Phone: +41 41 748 8444 | Fax: + 41 41 748 8440 www.capdyn.com | [email protected]
Branch Offices
399 Park Ave., 38th Floor, New York, NY 10022 Phone: (212) 798-3400 | Fax: (212) 798-3499
Key Personnel
Mr. Colin McGrady, Managing Director [email protected] Mr. Bill Murphy, Managing Director [email protected] Mr. Scott Myers, Managing Director [email protected] Mr. Stephen Sloan, Managing Director [email protected] Mr. Patrick Shattenkirk, Managing Director [email protected] Mr. Ian Charles, Vice President [email protected] Mr. Todd Konkel, Vice President [email protected] Mr. Brian Mooney, Vice President [email protected]
OVERVIEW
Year Founded 2001 Professionals Worldwide 16 Services Provided Cogent Partners is the worlds leading provider of
Mr. Filip Henzler, Principal [email protected] Mr. Helge Petermann, Director [email protected]
OVERVIEW
Year Founded 1999 Professionals Worldwide 21 Secondary Assets Under Management $1,500
private equity investment banking and research services. In 2003, Cogent provided clients with liquidity and portfolio advisory services for more than $4 billion in aggregate private equity commitments. Specializing in advisory and execution of a wide range of portfolio monetization and management strategies, Cogent creates customized solutions for its clients through three primary areas of focus: Secondary advisory services Recognized as the leader in private equity monetization services, Cogent has earned a reputation for effectively initiating, marketing, negotiating, structuring and closing sales of private equity assets. Our team utilizes its proprietary market and industry knowledge to evaluate and price client portfolios, engage the most appropriate potential buyers, negotiate on behalf of our clients, and provide structuring and legal expertise. Structured private equity products Cogent also offers an array of customized advisory and transaction services for collateralized fund obligations (CFOs) and other structured private equity vehicles. The firm and its professionals have been involved in some of the largest and most complex CFOs completed to date. Private equity research services Cogent Analytics is a non-discretionary advisor that provides original private equity market research and fund analysis for a broad array of institutional investors clients. The firm uses proprietary algorithms and rating methodologies to evaluate fund and general partner performance and provide our clients with an independent, unbiased assessment of the quality of their partnership investments and overall private equity portfolios.
INVESTMENT CRITERIA
Minimum Investment $1 million Maximum Investment $150+ million Participation in Syndicates Yes Interest Sought
Venture Funds LBO Funds Mezzanine Funds Special Situations Funds Real Estate Funds U.S. Funds Non-U.S. Funds Capital Dynamics also specializes in structured solutions (securitiza tions, loans against private equity portfolios, etc.)
55
Types of Clients
Types of Clients
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds Corporate Pension Funds
Average Size of Assets Managed by Clients
Public Pension Funds Endowments/Foundations Banks/Financial Institutions Family Offices Wealthy Individuals
Average Size of Assets Managed by Clients
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
11 Madison Ave., 13th Floor, New York, NY 10010 Phone: (212) 325-2000 www.csfb.com
Branch Offices
650 California St., 32nd Floor, San Francisco, CA 94108 Phone: (415) 249-2100 AT&T Corporate Center, 227 W. Monroe, 43rd Floor, Chicago, IL 60606 Phone: (312) 750-3000 2200 Ross Ave., 29th Floor, Dallas, 75201 Phone: (214) 979-4102 One Cabot Square, 6th Floor, London, E14 4QJ Phone: +44 20 7888 8888 JT Trust Tower, 4-3-1 Toranomon, Minato-KU, Tokyo 105-6002 Japan Phone: +81 3 5404 9000
Key Personnel
4 World Financial Center, 250 Vessey St., 27th Floor, New York, NY 10080 Phone: (212) 449-2682 | Fax: (212) 449-7969 www.mlx.ml.com
Key Personnel
OVERVIEW
Year Founded1981 Services Provided Advisory services for secondary limited partnership
Mr. Joe Hill, Managing Director [email protected] Mr. Alex Moomjy, Managing Director [email protected] Ms. Katherine Courpas, Director [email protected] Ms. Margaret Marshall, Vice President [email protected] Mr. Robert Myers, Associate [email protected] Mr. Daniel Claster, Analyst [email protected]
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds Public & Private Companies
Average Size of Assets Managed by Clients
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Average Size of Secondary Deals
OVERVIEW
Year Founded1994 Professionals Worldwide 60+ Services Provided Placement agent of secondary private equity inter-
Under $10 million $10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
ests, primary private equity limited partnership interests and other private fund financings.
56
Probitas Partners
Main Office
417 Montgomery St. , Suite 910, San Francisco, CA 94104 Phone: (415) 402-0700 | Fax: (415) 402-0052 www.probitaspartners.com | [email protected]
Branch Offices
55 Old Field Point Road, Greenwich, NY 6830 Phone: (203) 422-5000 | Fax: (203) 422-2481 www.nyppe.com | [email protected]
Branch Offices
1251 Avenue of the Americas, 44th Floor, New York, NY 10020 Phone: (212) 403-3662 | Fax: (212) 403-3537 New Court, St. Swithins Lane, London, EC4P 4DU Phone: +44 20 7280 5801 | Fax: +44 20 7280 1866
Key Personnel
245 Park Ave., 39th Floor, New York, NY 10167 Phone: (212) 672-1787 | Fax: (212) 792-4001
Key Personnel
Mr. Dexter B. Blake, III, Managing Director [email protected] Mr. Laurence G Allen, Managing Member [email protected]
OVERVIEW
Year Founded1998 Professionals Worldwide 18 Services Provided Transfer agent for secondary interests in private
Mr. Kelly DePonte, Principal [email protected] Mr. Craig Marmer, Partner [email protected] Mr. Dale Meyer, Partner (New York) [email protected] Mr. Nishant Saxena, Associate [email protected] Mr. Jefferson Stone, Vice President [email protected]
equity partnerships and restricted securities of private and public companies. NYPPE provides specialized transfer, research, advisory, and data services on over 2,100 private equity partnerships worldwide and over 1,000 restricted securities of private companies in the U.S.
Types of Clients
OVERVIEW
Year Founded 2001 Professionals Worldwide 16 Services Provided Probitas Partners provides advisory, agency and
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds Insurance Companies, Governments, Corporations, Regulatory Organizations
Average Size of Assets Managed by Clients
Under $10 million $10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Average Size of Secondary Deals
sophisticated structuring services to clients seeking liquidity and/or portfolio management solutions for alternative investment positions. Our success in Liquidity Management is built on the firms deep relationships with investors and fund managers, and on our ability to maintain strict confidentiality of information shared by sellers, general partners and prospective purchasers through all phases of the liquidity process. Liquidity Management can take a variety of forms that can be tailored to the individual needs of each investor: select secondary sales, "Primary Secondaries", portfolio auctions, total return swaps, and portfolio securitizations. Probitas will oversee the entire sales and/or structuring process, working with legal counsel, general partners and potential purchasers to ensure smooth execution and obtain the best results for the client.
Types of Clients
Under $10 million $10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds Public & Private Corporations
Average Size of Assets Managed by Clients
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Average Size of Secondary Deals
$10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
57
Triago
Main Office
1, boulevard de la Madeleine, Paris 75001 France Phone: +33 1 4703 0110 | Fax: + 33 1 4703 0699 www.triago.com | [email protected]
Branch Offices
630 Fifth Ave., 20th Floor, New York, NY 10111-2000 Phone: (212) 332-3350 | Fax: (212) 332-3351
Key Personnel
community worldwide since 1992. As a natural extension of our fundraising services to General Partners, Triago has developed a specialized practice in secondary transaction over the years, as advisors to Limited Partners whom seek to transfer or rebalance their private equity portfolios. Discreet interface Daily exposure and experience of the market Covering single fund positions to diversified portfolios A to Z guidance through the transfer process Sellers, GPs and buyers from USA, Europe, Asia and the Middle East
Types of Clients
Mr. Mathieu Dran, Partner [email protected] Mr. Firas Mallah, Associate [email protected] Mr. Bruno LaFleur, Associate [email protected] Mr. Stuart Sundlum, Advisor [email protected] Ms. Erin Sarret, General Counsel [email protected]
Wealthy Individuals Banks/Financial Institutions Family Offices Endowments/Foundations Public Pension Funds
Average Size of Assets Managed by Clients
Under $10 million $10 million to $99 million $100 million to $499 million $500 million to $999 million $1 billion +
Average Size of Secondary Deals
OVERVIEW
Year Founded 1992 Professionals Worldwide 11 Services Provided Triago has been a leading agent for the private equity
Under $10 million $10 million to $99 million $100 million to $499 million $100 million to $499 million
58
Secondary-Direct Managers
Firm Listings
FUNDS MANAGED
650 California St., 24th Floor, San Francisco, CA 94108 Phone: (415) 982-2953 | Fax: (415) 982-3027 www.industryventures.com | [email protected]
Branch Offices
Industry Ventures Fund I, L.P. Size $35 million Year Closed 2000
FUND-RAISING PLANS
The firm plans to raise a new fund in 2004.
6 Bayne Lane, Newburyport, MA 01950 Phone: (978) 499-7606 | Fax: (978) 499-0686
Key Personnel
INVESTMENT CRITERIA
Minimum $1 million Maximum $100 million Industry Preferences Software, IT Services, Internet Infrastructure and
Mr. Hans Swildens, Managing Director [email protected] Mr. Tom Litle, Managing Director [email protected] Mr. Ian Sobieski, Venture Advisor [email protected] Mr. Chris Sheehan, Venture Advisor [email protected] Mr. Rob Hayes, Venture Advisor [email protected] Mr. Aaron Day, Entrepreneur-in-Residence [email protected]
Networking
INSTITUTIONAL BACKERS
CSFB, Thomas Weisel Partners, Willowridge Investments, Family
Foundations
OVERVIEW
Year Founded 1999 Professionals Worldwide 6 Secondary Assets Under Management $100 million Description Industry Ventures LLC is a venture capital firm that acquires and manages emerging technology investments. The firm currently manages three limited partnerships representing $100 million of capital and over twenty portfolio companies. Our investment focus is to acquire direct and secondary investments in software, networking, and IT service companies. We differ from typical venture partnerships by also purchasing individual venture investments and entire portfolios from corporations, financial institutions and other venture funds. Our management teams experience and access to capital enable us to provide businesses with the investment support, corporate development assistance, and management advice necessary to maximize our investment returns.
601 Montgomery St., 16th Floor, San Francisco, CA 94111 Phone: (415) 291-0500 | Fax: (415) 837-3204 www.lakestreetcapital.com
Key Personnel
Ms. Gretchen Knoell, General Partner [email protected] Mr. Zachary Abrams, General Partner [email protected]
OVERVIEW
Year Founded 2003 Professionals Worldwide 5 Secondary Assets Under Management $300 million+ Description Lake Street Capital is focused on acquiring portfolios of direct venture investments in the secondary market. Once a portfolio is acquired, we continue to support the companies through follow-on investments as well as by providing strategic and financial advice. We enhance our returns through our value-added, hands-on approach based on our experience in corporate development combined with technology investment banking and private equity.
FUNDS ACQUIRED
EDS Ventures L.P. Net Asset Value $45 million Year Acquired 2003 Original Manager Electronic Data Systems Year Originally Closed 1999 Enron Ventures LLC Net Asset Value $30 million Year Acquired 2004 Original Manager Enron Year Originally Closed 1999
FUND-RAISING PLANS
The firm plans to raise a new fund but details are undisclosed.
INSTITUTIONAL BACKERS
Pantheon Ventures, Pomona Capital
59
MidOcean Partners
Main Office
INVESTMENT CRITERIA
Industry Preferences Newtorking and Communications, Software &
320 Park Ave., Suite 1700, New York, NY 10022 Phone: (212) 497-1400 www.midoceanpartners.com
Branch Offices
INSTITUTIONAL BACKERS
Coller Capital, BancBoston Capital, State of Michigan Retirement Systems and Abu Dhabi Investment Authority
1 Chester St., 3rd Floor, London SW1X 7HP United Kingdom Phone: +44 20 7201 4300
Key Personnel
OVERVIEW
Year Founded 2003 Professionals Worldwide 18 Description MidOcean Partners is a New York and London based private equity firm that invests in stable growth middle market companies in the United States and Europe. MidOcean was formed as an independent entity by the managers of DB Capital Partners, Deutsche Banks private equity group, to acquire Deutsche Banks late stage private equity investments in the United States and Europe.
36 Dover Street, , London, W1S 4NH Phone: +44 20 7647 1800 | Fax: +44 20 7647 1801 www.nova-cap.com
Key Personnel
Mr. Michael Kelly, Joint Managing Director [email protected] Mr. David Williamson, Joint Managing Director [email protected]
PORTFOLIO ACQUIRED
OVERVIEW
Year Founded 2002 Description Nova Capital Management is a specialist management company for private equity and venture capital portfolios.
INSTITUTIONAL BACKERS
NIB Capital Private Equity, Ontario Teachers Merchant Bank (Ontario Teachers Pension Plan), CPP Investment Board, HarbourVest Partners, Paul Capital Partners, Bregal, Coller Capital, Northwestern Mutual, The Yucaipa Companies and Presidential Life
PORTFOLIO ACQUIRED
Transaction Price 100 million Year Acquired 2002 Original Manager LICA Development Capital
98 Floral Ave., Murray Hill, NJ 7974 Phone: (908) 464-0900 | Fax: (908) 464-8131www.nvpllc.com
Key Personnel
1170 Peachtree St., Suite 1610, Atlanta, GA 30309 Phone: (404) 253-6388 | Fax: (404) 253-6377 www.peachtreeequity.com | [email protected]
Key Personnel
Mr. Anthony Abrahams, CFO & Partner Mr. Andrew Garman, Managing Partner Mr. Stephen Socolof, Managing Partner Mr. Thomas Uhlman, Managing Partner
OVERVIEW
Year Founded 2001 Professionals Worldwide 11 Description New Venture Partners, with a syndicate led by Coller
Mr. Matt Sullivan, Managing Director [email protected] Mr. Larry Deangelo, Managing Director [email protected] Mr. David Christopher, Principal [email protected]
OVERVIEW
Year Founded 2002 Professionals Worldwide 6 Secondary Assets Under Management $110 million Description Peachtree Equity Partners is a $110 million Atlanta-based private equity fund formed to acquire the private equity portfolio of legacy Wachovia Corporation, and to make Structured Equity Investments in profitable, middle-market companies located primarily in the Southeast. The principals of Peachtree founded and managed the private equity investment business Wachovia Corporation.
Capital, acquired the former Lucent Technologies/Bell Labs portfolio of 27 companies in December 2001, as the starting point for its independent operation as a venture capital firm. The firm has since agreed to help manage a venture portfolio put together by a team at British Telecommunications plc.
PORTFOLIO ACQUIRED
60
The funding for Peachtree was provided by the GS Vintage Funds, a series of investment partnerships managed by Goldman, Sachs & Co.s Private Equity Group. The Goldman Sachs Private Equity Group manages over $10 billion of capital devoted to private equity fund-of-funds strategies comprising primary fund commitments, secondary investments and direct coinvestments. Peachtree pursues Structured Equity investments in established, profitable companies with $20 million to $200 million of revenue and a Minimum of $2 million of operating income. A typical investment will range from $5 million to $15 million and can be in the form of debt, equity or a combination of both. Peachtrees investment style allows operating teas to access value-added capital and retain management of their profitable companies.
INSTITUTIONAL BACKERS
Goldman Sachs Vintage Funds
QTV Capital
Main Office
12930 Saratoga Ave., Suite D-8, Saratoga, CA 95070 Phone: (408) 865-0505 | Fax: (408) 865-1055 www.qtvcapital.com
Key Personnel
FUNDS ACQUIRED
Mr. Maury Domengeaux, Managing Director Mr. Randall Meals, Managing Director Mr. Steve Schlossareck, Managing Director
OVERVIEW
Year Founded 2002 Description QTV Capital (QTV) is a private equity venture fund focused
INVESTMENT PLANS
The firm plans to raise a new fund but details are undisclosed.
INSTITUTIONAL BACKERS
Goldman Sachs Vintage Funds
on the storage infrastructure of the enterprise. The QTV team leverages their real-world business backgrounds and deep domain expertise to help entrepreneurs create and build successful companies. Founded in March of 2000, QTV Capital invests across the storage value-chain in innovative start-ups that improve the capacity, reliability, flow, and safekeeping of data throughout the enterprise.
FUNDS ACQUIRED
13-15 West 54th St., 4th Floor, New York, NY 10019 Phone: (646) 273-5200 | Fax: (646) 273-5210 [email protected]
Key Personnel
Quantum Technology Ventures Transaction Price $11 million Year Acquired 2002 Original Manager Quantum Corp. Year Originally Closed 2000
Mr. Joseph Haviv, Managing Member Mr. Andrew Kohn, Partner [email protected] Mr. Kevin Haines, Partner [email protected] Mr. Helen Song, Partner [email protected] Mr. Chris Smith, Partner [email protected]
INVESTMENT CRITERIA
Industry Preferences Storage Components and Systems, Storage and
System Networking, Data Management and Services Software, Data Security and Integrity, Enterprise Applications
INSTITUTIONAL BACKERS
Pantheon Ventures
OVERVIEW
Year Founded 2001 Professionals Worldwide 7 Secondary Assets Under Management $1 billion Description Protostar Partners is a New York based middle-market leveraged buyout firm dedicated to acquiring portfolios of direct private equity investments. Protostar targets transactions ranging from $50 million to $250 million in equity value. Protostars One-Stop Liquidity Solution offers a unique offering to the market: in a single transaction, investors can gain liquidity on a broad range of buyout, venture capital and fund investments. The firm offers a balanced mix of strategic insight, operational capabilities and financial expertise, and is exclusively focused on building middle-market leaders.
Saints
Main Office
475 Sansome St., Suite 1850, San Francisco, CA 94111 Phone: (415) 773-2080 | Fax: (415) 835-5970 www.saintsvc.com | [email protected]
Key Personnel
INVESTMENT CRITERIA
Minimum $50 million Maximum $500 million Industry Preferences Industrial and Consumer Goods Companies
Mr. Ken Sawyer, Managing Director [email protected] Mr. David Quinlivan, Managing Director [email protected] Ms. Lilian Shakelford, Managing Director [email protected] Ms. Ghia Griarte, Vice President [email protected]
OVERVIEW
Year Founded 2000
61
Secondary Assets Under Management $300+ million Description Saints is a merchant venture capital firm headquartered in San Francisco that assists venture capital investors, financial institutions, mid-market buyout firms and corporations with immediate liquidity for their private investments.
Key Personnel
FUNDS MANAGED
Saints Ventures Year Closed 2000 Saints Capital I Year Closed 2002 Saints Capital II Year Closed 2003 Saints Capital III Year Closed 2003
Mr. David Wachter, Managing Director [email protected] Mr. Steve Wertheimer, Managing Director [email protected] Mr. Robert Migliorino, Managing Director [email protected] Mr. John Kim [email protected]
OVERVIEW
Year Founded 2001 Professionals Worldwide 8 Secondary Assets Under Management $300 million Description W Capital is a private equity firm providing liquidity alternatives in the secondary market for direct private equity investments. Since its founding, W Capital has become a leading participant in providing liquidity for the largest global corporations and financial institutions with close to $1 billion of invested Assets Under Management and $300 million of capital commitments.
INVESTMENT CRITERIA
Maximum $500 million Industry Preferences IT, Healthcare, Industrial, Consumer, Retail,
Communications
Vision Capital
Main Office
54 Jermyn St., 5th Floor, London, SW1Y 6LX United Kingdom Phone: +44 20 7389 6410 | Fax: +44 20 7389 6411 www.visioncapital.com | [email protected]
Key Personnel
Our experience, reputation and resources make us an ideal choice for corporations, financial institutions and distressed limited partnerships who desire to sell or restructure their private equity investment portfolios. By working with W Capital, current investors can generate cash and income from highly illiquid assets, reallocate assets into new strategic areas and eliminate follow on capital requirements for nonstrategic portfolio companies.
FUNDS ACQUIRED
OVERVIEW
Year Founded 1997 Professionals Worldwide 11 Description Vision Capital, based in London, was founded in 1997 and
Tredegar Corporation Net Asset Value $240 million Year Acquired 2003 Original Manager Tredegar Corporation 5 additional transactions, terms not disclosed
FUNDS MANAGED
W Capital Partners I, L.P. and affiliates Size $50 million Year Closed 2002 W Capital Partners, L.P Size $250 million Year Closed 2003
specialises in secondary direct portfolio acquisitions from private equity investors, as part of its focus on the whole private equity value chain from investors through private equity firms to their portfolio companies. It operates across multiple sectors, principally in Europe. The firm is based in London with a team of 11 people with backgrounds ranging from private equity and investment banking to industry.
PORTFOLIO ACQUIRED
FUND-RAISING PLANS
Recently completed fundraising.
Transaction Price $80 million Year Acquired 2003 Original Manager Morgan Grenfell Private Equity Ltd.
INVESTMENT CRITERIA
Minimum $5 million Maximum $100 million Industry Preferences Diversified by sector. Acquire venture, growth
INSTITUTIONAL BACKERS
Goldman Sachs Asset Management, Landmark Partners
and buyout.
W Capital Partners
Main Office
INSTITUTIONAL BACKERS
Leading worldwide institutional investors, pension funds, endowments, Foundations and family offices.
245 Park Ave., 39th Floor, New York, NY 10167 Phone: (212) 355-0770 | Fax: (212) 202-3979 www.wcapgroup.com
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Firm Rankings*
Secondary Buyers by Assets Under Management
Firm Name/Location Phone Assets Under Management
1) Lexington Partners Inc. New York 2) HarbourVest Partners LLC Boston 3) Landmark Partners Inc. Simsbury, Conn. 4) Coller Capital London 5) Paul Capital Partners San Francisco 6) CSFB Strategic Partners New York 7) Goldman Sachs Asset Management New York 8) AlpInvest Partners Inc. New York 9) Pantheon Ventures Inc. San Francisco 10) Partners Group Baar-Zug, Switzerland 11) Pomona Capital New York 12) PROTOSTAR Partners New York 13) AXA Private Equity Paris 14) FONDINVEST CAPITAL Paris 15) LGT Capital Partners Ltd. Pfaeffikon, Switzerland 16) Private Equity Investors, Inc. New York 17) The Crossroads Group, a Lehman Brothers Company Dallas 18) Adams Street Partners LLC Chicago 19) ARCIS Group Paris 20) Abbott Capital Management, LLC New York 21) Lake Street Capital San Francisco 22) Saints San Francisco 23) W Capital New York 24) Auda Advisor Associates LLC New York 25) Greenpark Capital Ltd. London 26) Liquid Realty Partners* San Francisco 27) Thomas Weisel Partners LLC San Francisco 28) FINAMA Private Equity Paris 29) Harvest Fund Tel Aviv 30) Montauk Advisors LLC Huntington, N.Y. 31) Peachtree Equity Partners Atlanta 32) AIG Global Investment Group New York 33) Industry Ventures San Francisco 34) Permal Capital Management, LLC Boston 35) Willowridge Incorporated New York 36) INVESCO Private Capital Inc. New York 37) Wilshire Private Markets Group Santa Monica, Calif.
*Liquid Realty acquires secondary interests in real estate funds only.
(212) 754-0411 (617) 348-3707 (860) 651-9760 +44 20 7631 8500 (415) 283-4300 (212) 538-7680 (212) 855-0478 (212) 332-6240 (415) 249-6200 +41 41 768 85 85 (212) 593-3639 (646) 273-5200 +33 1 4445 9270 +33 1 53 36 48 00 +41 55 415 94 15 (212) 750-1228 (214) 698-2777 (312) 553-7890 +33 1 4723 8862 (212) 757-2700 (415) 291-0500 (415) 773-2080 (212) 355-0770 (212) 863-2300 +44 20 7647 1400 (415) 296-9500 (415) 364-2500 +33 1 44 56 59 96 +972 3 710 8282 (631) 425-1994 (404) 253-6388 (646) 735-0520 (415) 982-2953 (617) 399-9245 (212) 369-4700 (212) 278-9000 (310) 451-3051
$5,800 $4,100 $3,800 $3,500 $3,200 $2,800 $2,500 $1,800 $1,300 $1,150 $1,000 $1,000 $700 $500 $500 $490 $444 $400 $350 $300 $300 $300 $300 $250 $250 $175 $140 $125 $115 $110 $110 $100 $100 $100 $100 $15 $15
65
Firm Name
Venture
LBO
Mezz.
Special Situation
Real Estate
U.S.
Non-U.S.
Other
Abbott Capital Management, LLC Access Capital Partners Adams Street Partners LLC AIG Global Investment Group Allianz Private Equity AlpInvest Partners Inc. ARCIS Group Auda Advisor Associates LLC AXA Private Equity California State Teachers Retirement System Capital Dynamics CMS Fund Advisors Inc. CSFB Strategic Partners The Crossroads Group, a Lehman Brothers Company DuPont Capital Management FINAMA Private Equity FONDINVEST CAPITAL Goldman Sachs Asset Management Greenpark Capital Ltd. Hamilton Lane Advisors Inc. HarbourVest Partners LLC Harvest Fund Horsley Bridge Partners INVESCO Private Capital Inc. J.P. Morgan Investment Management Landmark Partners Inc. Lexington Partners Inc. LGT Capital Partners Ltd. Liquid Realty Partners Montauk Advisors LLC Ontario Teachers Merchant Bank Pacific Corporate Group, LLC Pantheon Ventures Inc. Partners Group Pathway Capital Management Paul Capital Partners Permal Capital Management, LLC Pomona Capital Private Equity Investors, Inc. Silicon Valley Bank Trammell-Shott Capital Management VCFA Group/Venture Capital Fund of America Venture Investment Associates Thomas Weisel Partners LLC Willowridge Incorporated Wilshire Private Markets Group Wilton Asset Management LLC, c/o SSGA
67
Appendix A
Phone Number 44 870 607 6000 (212) 863-2300 (847) 948-2000 (916) 326-3400 (416) 868-4075 423 2 352929 (212) 816-5519 (303) 770-3772 (303) 832-9550 (302)477-6039 (914) 694-1300 (850) 488-4406 44 870 607 1352 (212) 418-6100 (650) 593-3100 (252) 442-7474 44 207 488 1212 49 5 115 60 40 (860) 757-9100 (610) 896-1223 (281) 372-5100 (914) 642-3347 (630) 368-5380 (812) 855-8311 (617) 574-5868 (626) 564-6000 (617) 452-3696 (617) 946-8401
(212) 639-3413 (212) 578-8532 (864) 458-6399 (517) 373-4330 (651) 296-3328 (406) 444-0001 (505) 424-2500 (518) 486-4641 (518) 447-2741 31 703 425 425 (330) 652-3475 (614) 628-8246 (503) 378-4111 (345) 949-8787 (949) 219-3096 (717) 787-8540 (717) 787-9008 (860) 403-5594 (614) 228-1151 (401) 222-2287 (415) 487-7003 (860) 702-3162 (415) 362-3484 (512) 542-6576 (212) 490-9000 (512) 225-1600 (206) 685-1822 (804) 344-3161
Metropolitan Life Insurance Co. New York Michelin North America Inc. Greenville, S.C. Michigan Department of Treasury
Lansing, Mich.
Montana Board of Investments Helena, Mont. New Mexico State Investment Council
Santa Fe, N.M.
Castle Private Equity AG Vaduz, Liechtenstein Citigroup Private Equity/Travelers Insurance Co. New York Colorado Fire & Police Pension Association Greenwood Village, Colo. Colorado Public Employees Retirement Association Denver E.I. du Pont de Nemours & Co.
Wilmington, Del.
New York State Teachers Retirement System Albany, N.Y. NIB Capital Bank N.V. The Hague, Netherlands Ohio Carpenters Health & Welfare Fund
Niles, Ohio
Financial Institutions Retirement Fund White Plains, N.Y. Florida State Board of Administration
Tallahassee, Fla.
Oregon State Treasury Salem, Ore. Overseas Asset Management (Cayman) Ltd.
George Town, Grand Cayman, Cayman Islands
Friends Provident
Dorking, Surrey, United Kingdom
General Motors Asset Management New York GIC Special Investments Pte Ltd
Redwood City, Calif.
Pennsylvania Public School Employees Retirement Harrisburg, Pa. Pennsylvania State Employees Retirement System Harrisburg, Pa. Phoenix Life Insurance Co. Hartford, Conn. Public Employees Retirement System of Ohio
Columbus, Ohio
Golden LEAF Foundation Rocky Mount, N.C. Granville Baird Capital Partners London Hannover Re Hannover, Germany Hartford Municipal Employees Retirement Fund Hartford, Conn. Haverford College Haverford, Penn. Houston Firefighters Relief & Retirement
Houston
Rhode Island State Treasury Providence, R.I. San Francisco Employees Retirement System San Francisco State of Connecticut Retirement & Trust Funds Hartford, Conn. Strategic Investment Solutions Inc.
San Francisco
IBM Retirement Fund White Plains, N.Y. Illinois Municipal Retirement Fund
Oak Brook, Ill.
Indiana University Foundation Bloomington, Ind. Liberty Mutual Insurance Group Boston Los Angeles County Employees Retirement Association Pasadena, Calif. Massachusetts Institute of Technology
Cambridge, Mass.
TIAA-CREF New York University of Texas Investment Management Co. Austin, Texas University of Washington Seattle Virginia Retirement System Richmond, Va.
73