See GRAPEVINE on Back Page

Millennium Technology Value Partners

of New York has hired Joseph Marks to
line up secondary-direct investments
in companies backed by venture capital
funds. Te move was unexpected as
Marks, a former Coller Capital executive,
had just co-founded a two-man second-
ary-market brokerage called Castlehaven
Advisors in mid-2010. His partner there,
Tom Dann, now is in talks to bring in
a new stafer and may hire additional
personnel. Castlehaven focuses on sales
of interests in funds backed by the U.S.
Small Business Administrations Small
Business Investment Company program.
James Hoffman has lef a post in Pritzker
Groups buyout unit to set up his own
frm. Like Pritzker, Hofmans startup,
called Magna Capital, is based in Chicago.
Magna will concentrate on buyouts and
recapitalizations of U.S. businesses in a
variety of sectors, including industrial
THE GRAPEVINE
JANUARY 26, 2011
Calpers Seeks Bids for Hefty Fund Interests
Calpers is pitching more than $800 million of private equity fund stakes on the
secondary market.
Te $226 billion pension system began showing the ofering to prospective buy-
ers in the last week or so via UBS, working under the codename Project Alpha. A
sale is expected to take place quickly, perhaps in a matter of weeks.
Project Alpha is likely to rank among the biggest secondary-market sales of early
2011. For a portfolio of its size, however, it contains a small number of positions
an estimated fve or six buyout-fund interests of up to $250 million each.
Te pledges are weighted heavily toward large vehicles from well-known manag-
ers, with sources pointing to Blackstone Group, Carlyle Group, Kohlberg Kravis Rob-
erts and TPG as ftting the profle for shops whose funds might be in the mix. Tat
said, the specifc identities of the underlying managers remain unclear.
So what is Calpers motivation? Potential pricing appears attractive, with stakes
See UBS on Page 5
Jefferies Reshaping Fund-Placement Division
Jefferies & Co. is restructuring its placement-agent unit while starting a sepa-
rate division to raise capital for clients distressed-asset and special-situations
vehicles.
Te new unit would pitch both private equity funds and hedge funds as part of
its targeted strategy, with an initial concentration on the U.S. and Western Europe.
It would function as part of Jeferies high-yield bond desk.
Kelli Roiter is leading the efort. She moved to the high-yield department at year-
end from Jeferies broader placement group, which has sufered from staf losses
as well as accusations that it upset some large clients by employing heavy-handed
marketing tactics. Now the word is that the New York investment bank is planning
a new look for the operation, although details of that efort remain unclear.
Transfers and defections already have depleted the groups staf, which recently
See JEFFERIES on Page 6
TPG Strings Together Small-Investment Series
TPG wants to replicate a fund that pursues investments deemed too small for its
main buyout vehicles.
Te Fort Worth, Texas, frm has yet to set an equity target for the new pool, called
TPG Star 2, but is seen as likely to aim for $1.5 billion the same amount it col-
lected for the inaugural fund in the series. It began meeting with investors in recent
weeks, telling them it will likely start a formal marketing push during the second
half of the year.
TPG Star 2 would pursue investments up to $75 million each while employing
venture capital, growth-equity, buyout and turnaround strategies. While it would
have the ability to invest globally, the entity would more likely mimic its 2008-vin-
tage predecessor by focusing on deals in North America, India and China.
TPG has told backers that the frst fund is nearly out of capital. Tat vehicle took
See TPG on Page 6
2 LARGEST FUND MANAGERS
3 NASBIC Extends Membership Reach
3 StepStone Ponders Secondary Offering
4 Morgan Stanley Chips Away at Target
4 CIVC Shortfall Made Offcial
4 China Specialist Shifts to Co-Investing
5 Bank Street Maps Marketing Route
5 Constitution Opts for Dual Pitches
5 LGV Pitch Enters Second Round
6 Matrix Folds Placement Efforts
7 FUND-RAISING ACTION
Private Equity
INSIDER
Blackstone, Carlyle In Line for Biggest-Manager Throne
2 January 26, 2011
Largest US-Based Managers of Private Equity Funds
Excludes frms primarily managing real estate or hedge funds
Assets Under
Management
12/31/10
($Bil.)
1 Goldman Sachs $104.7
2 Blackstone Group 102.3
3 Carlyle Group 97.7
4 Bain Capital 65.0
5 Kohlberg Kravis Roberts 58.8
6 Apollo Management 55.2
7 TPG 48.0
8 Oaktree Capital Management 47.3
9 Credit Suisse 40.8
10 Warburg Pincus 32.0
11 J.P. Morgan Asset Management 29.4
12 Cerberus Capital Management 24.0
13 Fortress Investment Group 23.7
14 Angelo, Gordon & Co. 23.0
15 PineBridge Investments 23.0
16 Hellman & Friedman 22.9
17 Providence Equity Partners 22.0
18 HarbourVest Partners 21.4
Assets Under
Management
12/31/10
($Bil.)
19 First Reserve $20.3
20 Adams Street Partners 20.0
20 Welsh Carson Anderson & Stowe 20.0
22 Ares Management 19.3
23 Lexington Partners 18.0
24 General Atlantic 17.0
24 Riverstone Holdings 17.0
26 Thomas H. Lee Partners 16.2
27 NB Alternatives 16.0
27 TA Associates 16.0
29 Madison Dearborn Partners 14.6
30 J.C. Flowers & Co. 14.4
31 Advent International 14.1
32 Silver Lake Partners 14.0
33 Commonfund Capital 11.8
34 TCW Group 11.5
35 New Enterprise Associates 11.0
36 BlackRock 10.2
Goldman Sachs is still the largest operator of private equity
funds in the U.S., but could soon be unseated as new regula-
tions force banks to step back from the business.
Goldmans private equity vehicles had $104.7 billion under
management as of Dec. 31, according to Private Equity Insiders
Private Equity Directory. Tat marks a $10.3 billion decline
from a year earlier, when the bank also was the market leader
and it has indicated that it will keep chipping away at the
total.
Tere are even indications that Goldman might spin of its
private equity operations altogether. Te reason: Te Dodd-
Frank Acts so-called Volcker Rule, which once implemented
will restrict banks from sponsoring alternative-investment
pools while limiting their investments in such vehicles to an
amount equal to 3% of Tier 1 capital. Goldman, which repre-
sents an important source of backing for its own funds, had
$68.5 billion of Tier 1 capital as of June 30. Tat means it could
only hold $2 billion of interests in alternative-investment ve-
hicles.
Who could step up to take Goldmans place? Number-two
Blackstone Group is only a hair behind, at $102.3 billion, and
has been adding assets. Te frms total represents a $15.4 bil-
lion increase from a year ago, when it was in third place.
Blackstones count stands to grow as well, as the shop con-
tinues raising capital on top of the roughly $15 billion it already
has collected for its newest buyout fund, Blackstone Capital
Partners 6.
Te second-place fnisher from 2009, Carlyle Group, is now
in third. Its $97.7 billion tally marks an increase of $9.8 billion
from a year ago, however, and it could breeze into frst place by
completing a planned takeover of the 40 billion ($55 billion)
AlpInvest Partners.
As non-bank players, Blackstone and Carlyle will be insu-
lated from the Volcker Rule. At the same time, the institutions
are under pressure to add assets Blackstone to keep holders
of its publicly traded shares happy by increasing fee revenues,
and Carlyle to bulk up ahead of an initial public ofering of its
own.
Apollo Management also is among those planning to go pub-
lic. It moved up to sixth place from eighth thanks to an increase
in assets. TPG, another IPO candidate, slipped one spot to sev-
enth despite a slight rise in its total.
Tose who might eventually be in the same boat as Gold-
man include J.P. Morgan. Te bank, whose alternative-invest-
ment exposure lies largely in hedge funds, ranks 11th with
$29.4 billion in its private equity vehicles. Tats up $4.4 billion
from 2009. Most top players saw their totals increase less than
$10 billion in 2010.
Private Equity Insiders Private Equity Directory can be
See THRONE on Page 6
Private Equity
INSIDER 3
NASBIC Extends Membership Reach
Te National Association of Small Business Investment Com-
panies is broadening its mandate.
Te trade group, which until now has represented only pri-
vate equity frms backed by the U.S. Small Business Administra-
tions Small Business Investment Company program, wants to
add non-SBIC players to its constituency. As part of the move,
its planning to work with larger shops than those running most
SBIC vehicles.
Te organization also plans to change its name to the Small
Business Investor Alliance.
NASBICs expanded scope takes aim at mid-size private eq-
uity frms namely, those running funds of up to about $600
million. Tey would include buyout and mezzanine-fnance
shops, along with operators of funds of funds and secondary-
market vehicles.
Te move comes in part as a response to feelings among cer-
tain mid-size players that they have been neglected by the pri-
vate equity industrys main trade groups, the National Venture
Capital Association and the Private Equity Growth Capital Coun-
cil. Te thought is that the NVCA puts venture capital frms
frst, while the Private Equity Growth Capital Council is will-
ing to protect big buyout shops at the expense of their smaller
peers.
Te dissatisfaction was reinforced in the organizations re-
sponses to a Dodd-Frank Act provision that requires most in-
vestment frms with more than $150 million to register with
the SEC. Te NVCA, for example, helped negotiate an exemp-
tion for venture capital managers while telling lawmakers that
buyout shops ofen eliminate jobs. Te Private Equity Growth
Capital Council supported the signups, in part refecting the
fact that most large buyout specialists already are enlisted with
the SEC.
For its part, the Private Equity Growth Capital Council has
been trying to appeal to smaller frms and counts a few of those
shops among its members. However, mid-size buyout man-
agers still were lef to absorb higher compliance costs under
Dodd-Frank.
Teres a need for middle-market funds to be represented
in Washington, NASBIC president Brett Palmer said.
NASBICs increased focus on mid-size shops also ties in with
heightened interest among those outfts in taking part in the
SBIC program, which ofers low-interest government loans to
fund managers that back small businesses. For example, Per-
seus, Riverside Co. and Veronis Suhler Stevenson set out in the
past year to assemble their frst SBIC funds.
NASBICs recent lobbying eforts have included persuading
lawmakers to exempt SBIC funds from the so-called Volcker
Rule, a yet-to-be-fnalized Dodd-Frank provision that limits
bank investments in outside managers alternative-investment
vehicles. In fact, it appears SBIC pools will be the only type of
private equity fund to gain such an exception. NASBIC also
helped push for a measure that will allow some investors to pay
no capital-gains taxes on profts from sales of small businesses.
Palmer played a key role in both eforts. He joined the group in
2008 from the National Association of Insurance Commission-
ers, and earlier held staf positions in the U.S. House and the
U.S. Department of Commerce.
StepStone Ponders Secondary Offering
In a bid to simplify its secondary-market investments, Step-
Stone Group is mulling the creation of a fund targeting those
deals.
Details of the efort remain unclear, but expectations are
that the La Jolla, Calif., advisory frm will try to raise less than
$500 million the amount of client capital it currently has de-
ployed among secondary-market deals via at least a half-dozen
separate accounts.
Te idea behind establishing a commingled fund would be
to reduce the complexity of managing similar activities going
forward, at a time when interest in such plays has been grow-
ing. Because secondary-market sellers typically like to deal
with single buyers, StepStone generally sets up special-purpose
vehicles to play that role when more than one of its clients want
in on a purchase then distributes interests in those entities
among its separate accounts. But doing that on a deal-by-by
deal basis can be an expensive and bureaucratic process.
Still, there are some clients that prefer the tailored nature of
separate accounts. For that reason, StepStone is thinking about
setting up its fund to invest alongside their portfolios.
StepStone set out once before to assemble a secondary-mar-
ket fund, only to drop the efort in favor of the separate-account
format when all of the vehicles would-be backers wanted to
commit $50 million or more. Should the new fund also attract
only big-ticket pledges, the frm would likely stick with sepa-
rate accounts again.
StepStone generated some expectations that it would try
again to start a secondary-market fund with its September pur-
chase of Silverbrook Private Equity, a new frm whose personnel
included former Hamilton Lane executive Michael McCabe and
Pomona Capital alumni Thomas Bradley and Mark Maruszews-
ki. Tey now work at StepStone, which prior to the acquisition
had only one partner working solely on secondary deals: James
Gamett.
StepStones secondary-market clients include Ohio Public
Employees, which opened a $200 million account late last year,
and Arizona Public Safety Personnel.
January 26, 2011
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Private Equity
INSIDER 4
Morgan Stanley Chips Away at Target
Morgan Stanleys latest fund of funds has begun attracting
institutional backers.
Te pledges came by way of the funds second close, which
took place last week with $287 million. Tat followed a frst
close in July with $150 million from friends and families of
bank executives. Te entity, Morgan Stanley Private Markets
Fund 5, has an overall equity target of $1.25 billion.
However, investors said Morgan Stanley would be satisfed
with anything more than $800 million, given weak market con-
ditions. Te fund-of-funds business has not delivered good
value across the board and investors are right to pull back a
little, one manager said.
On the other hand, Morgan Stanleys 2004-vintage Fund 3
and the 2008-vintage Fund 4 are posting top-quartile returns.
Tose gains in part refect an ability to put capital to work more
widely than most funds of funds, including capacity for co-in-
vestments and secondary-market purchases both of which
tend to produce larger returns than direct fund stakes.
Fund 5 can use up to 25% of its capital for co-investments
and 15% for secondary-market deals. Tat marks a change
from Fund 4, which could direct a combined 60% of its equity
to such transactions. Te reason for the step back: Morgan
Stanley is routing secondary purchases to a fund it set up to
focus solely on those deals.
Tat vehicle, Morgan Stanley Global Secondary Opportuni-
ties Fund, held its fnal close in May with $585 million.
Morgan Stanley plans to pocket 5% of Fund 5s profts,
which is typical for a fund of funds but is only half the typi-
cal carry for a co-investment or secondary-market pool. Te
vehicle invests in small or specialized funds, including those
following buyout, venture capital, mezzanine and distressed-
investment strategies. It is run by a unit within the $19 billion
Morgan Stanley Alternative Investment in West Conshohock-
en, Pa.
Backers of the previous Private Markets funds include Amica
and University of New Hampshire Foundation, along with U.K.
pension systems Northumberland County Council and South
Yorkshire Pensions.
CIVC Shortfall Made Offcial
CIVC Partners newest buyout fund has come up short of its
equity target.
Te Chicago frm quietly held the fnal close for its CIVC
Partners Fund 4 in the past month or so with $375 million. It
had initially talked about collecting as much as $700 million
for the vehicle, but later lowered its goal to $575 million.
Market players viewed that fgure as more reasonable. It still
proved too ambitious though, as weak fnancial-market condi-
tions stymied capital-raising eforts across the private equity
industry. Potential backers also were turned of by the results
of CIVCs largest purchase to date: a 2003 investment in bond
insurer FGIC alongside Blackstone Group, Cypress Group, PMI
Group and others. Tat deal proved disastrous as the now-
bankrupt FGIC found itself unable to honor its policies with
CIVC realizing less than 10% of its position.
Indeed, there has been talk for a while that CIVC would
miss Fund 4s capital-raising target. In mid-2010, for example,
market players said the campaign was about to wrap up with
as little as $450 million. Tat followed a February SEC fling
that indicated the shop had collected just $250 million. Among
the later commitments was a $25 million pledge from Montana
State Board in September.
CIVC invests mainly in business-service, fnancial-service,
and marketing-and-information companies. Te shop and
placement agent UBS began marketing Fund 4 in mid-2008
alongside a stapled secondary-market sale involving $400 mil-
lion of stakes that Bank of America held in its previous vehicles.
BofA, which had been one of CIVCs largest backers, pulled back
from private equity funds around the same time.
China Specialist Shifts to Co-Investing
Fund-of-funds manager Private Equity Analytics has started
a new capital-raising campaign, just a few months afer selling
a large chunk of its holdings on the secondary market.
Te New York shop hasnt set an ofcial equity target for
the vehicle, dubbed ChinaBridge Crossborder Fund, but ap-
parently has an eye on collecting $500 million over the next
few years.
Te plan is for the fund to follow in the footsteps of some
prior Private Equity Analytics oferings by investing in main-
land China. Instead of adhering to a traditional fund-of-funds
strategy, however, it would gradually take on co-investments
in batches of up to $100 million each. Te entity could have a
pledge-fund structure that would allow limited partners to opt
in or out of specifc deals.
Te shif doesnt come as a total surprise, given Private Eq-
uity Analytics recent history. Te shop, led by Citigroup Ven-
ture Capital alumnus Tom Darling, merged with wealth manager
MJX Capital in 2009. Darling already counted MJX founder
Robert Sillerman among his clients at the time of the arrange-
ment, which saw him take on the MJX name.
But MJX wound up selling a large portion of its holdings the
next year amid word that Darling would re-emerge under the
Private Equity Analytics banner with a slightly diferent strat-
egy. His shop, whose current connection to MJX remains un-
clear, now is talking mostly to large limited partners interested
in getting a toehold in Chinas private equity market.
Chinas private investment community has a reputation for
shutting out players without local ties something Private Eq-
uity Analytics presents itself as having in the form of relation-
ships with managers including China Renaissance Partners,
Orchid Asia and WI Harper. Te shop has said it would co-invest
mainly with frms it has worked with before.
Private Equity Analytics has recently cited a 23.5% rate of
return on investments in 11 funds run by six managers, most
of which are not set to mature until 2014.
January 26, 2011
Private Equity
INSIDER 5
Bank Street Maps Marketing Route
Fund-raising plans are taking shape within the growth-
capital division that former Key Venture Partners executive Ted
Mocarski is setting up at Bank Street Group.
Mocarskis unit, Bank Street Capital, is expected to begin
marketing its frst formal fund in the coming year with an
equity target of $150 million to $200 million. Right now, the
operation is investing with a smaller pool of capital from its
executives and their acquaintances.
Te timing of the funds launch will likely depend on how
quickly Bank Street Capitals initial backing is put to work. Te
frm has one deal in its portfolio so far, and probably wants to
add one or two more so it can have some results to cite when it
approaches new limited partners.
Bank Street Group, an investment-banking frm in Stam-
ford, Conn., ofcially opened Bank Street Capital for business
last week. Te new shop focuses on investments in media, tele-
communications and related technology businesses some-
times drawing on input from two dozen employees of its parent
who specialize in those sectors.
However, Bank Street Capital wont get involved as a backer
of Bank Street Group clients.
Bank Street Capital is positioning itself to fll a void that
emerged in recent years as venture capital shops that took part
in growth-capital deals became less active and buyout frms
looked toward larger transactions. At Key, a Boston operation
that concentrates on growth-capital plays with backing from
Cleveland-based KeyCorp, Mocarski was in charge of venture
capital investments.
Mocarski separated from Key about fve months ago. Sepa-
rately, a team that ran funds of funds and secondary-market
vehicles within KeyCorps Key Capital division spun of around
yearend to form Cuyahoga Capital. Tat group, headed by Chris-
topher Hanrahan and Bart Shirley, now is attempting to raise
$125 million for a secondary-market entity called Cuyahoga
Capital Partners 4.
Constitution Opts for Dual Pitches
Constitution Capital is simultaneously assembling a fund of
funds and a co-investment vehicle.
Te Boston shop began marketing the entities to investors
in the U.S. and abroad in recent weeks, each with an equity tar-
get of $250 million. It already has collected $14 million for the
fund of funds, Ironsides Partnership Fund 2, while gathering
$6 million for the Ironsides Co-Investment Fund 2.
Te tandem oferings mark a change in strategy for Con-
stitution, which last time around combined the fund-of-funds
and co-investment approaches into a single vehicle called Iron-
sides 1. Tat entity held its fnal close in June 2008 with $600
million, beating its $500 million equity target.
Like Ironsides 1, the new funds invest in the U.S. while avoid-
ing the smallest and largest underlying vehicles putting their
money to work with pools of $300 million to $5 billion.
Constitution formed in October 2007, when a Standard Life
Investments team led by Daniel Cahill walked out following a
dispute over the economics of a planned spinof. Its frst funds
backers included the U.K. governments Universities Superan-
nuation Scheme, which bought a 10% stake in the management
company. Te shop also manages separate accounts, including
a mandate it won last month from private equity newcomer
Westfeld Contributory Retirement.
LGV Pitch Enters Second Round
LGV Capital has held a frst close for its latest buyout fund.
Te London frm completed the initial round of marketing
for its LGV 7 Private Equity Fund at yearend with 171 million
($275 million). It is aiming for 250 million overall.
LGT invests in U.K. companies with enterprise values above
25 million, with a wide scope that includes consumer, leisure,
service and healthcare businesses. Te strategy has worked well
lately, positioning some of the shops funds as top performers.
LGV 5, which held its fnal close in 2005 with 200 million,
was posting a 76.9% rate of return as of Dec. 31. Tat crushed
the average gain of 11.4% by European buyout funds from the
same year, according to Preqin. Likewise, the 2004-vintage LGV
4 was returning 65.7% heading into this year compared to a
22.7% average.
Its too early to judge how LGV 6 is performing. Tat fund
held its fnal close in 2009 with 98 million.
LGV, a unit of insurer Legal & General, is one of the oldest
private equity frms in the U.K. It counts a number of European
players among its backers, along with several U.S. institutions.
Tey include Carnegie Mellon Universitys endowment, DuPont
Capital, MetLife and University of Utah Endowment.
UBS ... From Page 1
in funds like those in the Project Alpha portfolio recently trad-
ing near net asset value.
As for likely buyers, Calpers sees an opportunity to exploit
demand from a number of large secondary-market fund opera-
tors that are sitting on capital they would like to deploy soon,
preferably in large chunks. UBS also is giving small and mid-
size players a shot by allowing them to take specifc fund inter-
ests or even portions of those positions say, $100 million of
a $200 million commitment.
A single suitor remains a possibility though, as was evi-
denced by a number of sales last year. Two of them involved
AXA Private Equity, which bought $1.9 billion of fund stakes
from Bank of America and paid 534 million ($730 million) for
two private equity units of Natixis. Canada Pension Plan also
bought more than $1 billion of fund interests from PSP Invest-
ments.
Calpers sold $2 billion of private equity fund interests in
2008 via UBS. Tat sale, dubbed Project Monarch, saw Conver-
sus Capital, HarbourVest Partners, Lexington Partners and Pan-
theon Ventures emerge as the winning bidders.
January 26, 2011
Private Equity
INSIDER 6
Matrix Folds Placement Efforts
Matrix Group is shuttering its placement-agent unit.
Te London operation is scheduled to wrap up its activities
as soon as March. It already has trimmed its staf this month
from fve executives to two: partners Edward Holdsworth and
Charles Lemon. Gone are principal Charlie Jolly, partner Enzo
Narciso and associate James Shipperlee. Jolly now works as a
vice president at Pathway Capital. Its unclear if Narciso and
Shipperlee have found new jobs.
Matrixs withdrawal from the fund-placement business is
due to poor capital-raising conditions. Te shutdown came as a
surprise, however, as is evidenced by the fact that Narciso had
only arrived in September. He last led the private equity busi-
ness at Union Bancaire Privee of Geneva.
Matrixs placement division functioned as part of the com-
panys investment-banking area, which has been expanding.
Te placement team launched in 2004 with a focus on small
funds, and went on to raise more than 1 billion ($1.4 billion)
for clients including Langholm Capital, Life Sciences Partners
and Litorina Kapital. Te group never raised capital for Matrixs
own vehicles, which include private equity funds and hedge
funds. Tose entities are pitched by other stafers who remain
on board.
Jefferies ... From Page 1
numbered about 20. In addition to Roiters move, the team is
losing group head Stephen Gray to VantagePoint Venture Part-
ners. And Luke Belcastro shifed to Jeferies equity capital
markets area in September. He was among several recruits who
arrived in 2009 as part of an expansion of the banks placement
operation coming on board with former Mallory Capital col-
leagues Peggy Marshall and Donal Orr.
As for the criticisms of Jeferies marketing techniques, they
center around the banks handling of commitments from cli-
ents prior backers. Te talk is that fund managers are only
given a short time to round up returning limited partners on
their own, with the institution then stepping in to line up those
commitments for a fee. And the charges ramp up quickly from
there.
Tey were telling investors, You have 75 days to get your
re-ups, afer which we might charge you double our normal
rate, then afer six months it goes up to 3 times, an outside
fund-marketing specialist said. He attributed Jeferies ability
to employ such tactics to an overfow of demand for placement
services.
Jeferies recent clients have included Stockholm buyout
frm Valedo Partners, which is set to hold the fnal close for its
second fund in the coming weeks above the vehicles equity tar-
get of 1.6 billion Swedish krona ($250 million).
Roiter joined Jeferies in 2008 from Citigroup, where she
marketed private equity funds to wealthy individuals. Before
that, she marketed investments at Credit Suisse and predeces-
sor Donaldson, Lufkin & Jenrette.
TPG ... From Page 1
just eight months to assemble, and exceeded its equity target
by $500 million. But given todays tougher marketing environ-
ment, investors expect the frm to remain in the market with
Fund 2 until yearend, and perhaps into early 2012.
Te ofering also faces competition for investors with a num-
ber of mid-size buyout specialists who last raised capital in 2006
or 2007. It should help that the frst TPG Star fund has fared
well, with a net rate of return of 8.1% as of Sept. 30. One limited
partner deemed that fgure impressive in light of the fact that
the average age of the entitys holdings is a mere 1.5 years.
Te TPG Star name is an acronym for smaller transactions
with allied resources. Tat is, the original vehicle has access to
the parent shops extensive research and operational resources
something TPG views as a selling point.
Te series was created to capture potentially lucrative deals
that TPG had to turn away because they didnt ft the profle of
the frms big-buyout funds. Te most recent of those vehicles,
TPG Partners 6, held its fnal close in early 2009 with $19.8
billion and the capacity to put billions of dollars into each of
its deals.
William McGlashan leads a 20-person investment team that
runs the TPG Star portfolio. Limited partners include AP Fon-
den 2, Calpers, Los Angeles City Employees, New Jersey State
Investment, New York Common Fund, Oregon State Treasury and
Washington State Board.
Throne ... From Page 2
accessed in Te Marketplace section of the newsletters
website, peinsider.com. Te ranking encompasses managers
of buyout, venture capital, mezzanine-fnance and distressed-
asset funds in the U.S., along with secondary-market vehicles
and funds of funds. It also includes real estate funds and
hedge funds run by those frms. However, it leaves out sepa-
rate accounts and excludes shops that primarily manage real
estate funds and hedge funds.
January 26, 2011
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Private Equity
INSIDER 7
FUND-RAISING ACTION


Manager


Fund, Key Executive


Type: Focus

Placement
Agent
Target
Amount
(Mil.)


Action
Alcuin Capital Partners,
London
Alcuin Fund 3,
Mark Storey
Buyout: Europe 100 Held first close
with 81 million.
Black Diamond Capital Management,
Greenwich, Conn.
BDCM Opportunity Fund 2,
Stephen Deckoff
Distressed
debt
C.P. Eaton $750 Held final close
with $982 million.
Brookfield Asset Management,
Toronto
Brookfield Special Situations 3,
Cyrus Madon
Distressed
asset
(None) $1,000 Held second close
with $370 million.
Constitution Capital Partners,
Andover, Mass.
See Page 5
Ironsides Partnership Fund 2,
Daniel Cahill and John Guinee
Fund of funds $250 Held first close
with $14 million.
Constitution Capital Partners,
Andover, Mass.
See Page 5
Ironsides Co-Investment Fund 2,
Daniel Cahill and John Guinee
Co-investment $250 Held first close
with $6 million.
LGV Capital,
London
See Page 5
LGV 7 Private Equity Fund,
Ivan Heywood
Buyout: U.K. 250 Held first close
with 171 million.
True North Management Partners,
Tempe, Ariz.
True North Venture Partners,
Michael Ahern
Venture capital (None) $300 Held first close
with $192 million.
To view all past Fund-Raising Action entries, visit The Marketplace section of PEinsider.com
January 26, 2011
F ORUM HOS T
Nancy M. Szigethy
Founder
NMS Management, Inc.
F ORUM CHA I RME N
Conley Brooks, Jr.
President
Sawmill Private
Management, Inc.
Vernica Maldonado
Executive Director
GEM Family Office
Dorothy Collins Weaver
Chairman &
Chief Executive Officer
Collins Capital
F ORUM A DVI S ORY B OA RD
Peter E. Tony Guernsey, Jr.
Chief Client Officer, Emeritus
Wilmington Trust Company
Gailen Krug
European Private Equity
Albourne Partners Limited
KE Y NOTE S P E A KE R
Robert J. Shiller
Distinguished Professor of
Economics
Yale University
F E A TURE D S P E A KE RS
Jonathan Anderson
Senior Global Emerging Market
Economist
UBS Investments
Mark A. Angelo
Founder & President
Yorkville Advisors, LLC
Diana Barrett
President
The Fledgling Fund
Sheila H. Berube
Executive Vice President &
Chief Investment Officer
WLD Enterprises, Inc.
Vicente Carrillo-Batalla
Managing Director
C.A. Ugave
Jeff Cook
President & CEO
Policy and Taxation Group
Howard R. Cooper
Chief Executive Officer
Cooper Family Office
Mark H. Daniell
Chairman
Raffles Family Wealth Trust
Pte Ltd
Michael J. Flynn
Vice President & CIO
Kinship Trust Company, LLC
Joshua S. Friedman
Co-Chief Chairman &
Co-Chief Executive Officer
Canyon Partners, LLC
Christopher B. Galvin
Chairman, CEO & Co-Founder
Harrison Street Capital LLC
Tony Gannon
Chief Executive Officer
Abbey Capital Limited
Nancy S. Gillespie
Manager
Sayles Group LLC
David Lansky
President
The Family Business Consulting
Group, Inc.
Stuart Lucas
Chairman
Wealth Strategist Partners LLC
Arthur Margon
Partner
Rosen Consulting Group
William J. Reik III
Managing Member, CIO
Bristol Investment Partners
David Rosenberg
Chief Economist & Strategist
Gluskin Sheff + Associates Inc.
Donna E. Shalala
President
University of Miami
Inder Sodhi
Chief Investment Officer
Doshi Capital Partners
Clara Villoslada
Hevimar
Michael D. Whitty
Attorney at Law
Vedder Price P.C.
Peter Zeihan
Vice President of Analysis
Stratfor
TO RE GI S TE R: Please call 516 933 3700, fax 516 933 3705, or register online at www.nmsmanagement.com
Forum Faculty
The NMS Family Office Forum
The Ritz-Carlton
Palm Beach, Florida
March 6-9, 2011
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January 26, 2011
THE GRAPEVINE
... From Page 1
products and services, as well as
healthcare products. Magna appears
to be receiving backing from Pritzker
Group, which counts the Hyatt hotel
chain among its holdings. Hofman, who
lef Pritzker late last month, remains an
advisor to the frm.
Tarrus Richardson is setting up a buyout
frm whose goal is to acquire contract-
ing companies that can beneft from
the minority-owned designation he
can provide. Richardson, who is black,
would own a controlling stake in each
portfolio company, which would gain a
marketing advantage by becoming eli-
gible to compete for work with organi-
zations that operate diversity programs.
He is about three months away from the
ofcial start of his New York frm, IMB
Development. IMB would target proft-
able companies that already perform
contract work for government agencies
or corporations. Richardson intends to
hold companies for 10-20 years, consid-
erably longer than typical buyout frms.
In October, he lef ICV Partners, a New
York buyout frm he co-founded.
Texas Employees is seeking a private eq-
uity specialist to join its investment divi-
sion. Te recruit would help monitor the
$21 billion pension systems $1.3 billion
private equity fund portfolio. Reporting
to investment chief Patrick OHara, he or
she also would manage personnel within
the retirement systems private equity
staf. In September, the pension fund
laid out plans to invest $550 million in
around 10 vehicles during fscal year
2010, which started Sept. 1. It has an
8% target allocation for private equity
funds, which it expects to reach by 2015.
Altius Associates advises Texas Employ-
ees on its private equity investments.
Private bank Union Bancaire Privee
plans to increase its exposure to private
equity investments in the coming year.
Te Geneva operation has less than
1% of its 72 billion Swiss francs ($76
billion) of assets invested with North
American and Asian buyout funds. It
wants to broaden its portfolio by back-
ing mezzanine-fnance and secondary-
market funds, and by co-investing
alongside its private clients. Te bank
invests through a private equity division
that deploys client money. UBP, which
also invests its own capital, runs private
equity operations in London, Geneva
and New York.
New York buyout shop American Indus-
trial Partners has hired former Liberty
Partners managing director Ben DeRosa
to head marketing and deal origina-
tions as a partner. DeRosa started last
week. American Industrial is investing
through its fourth fund, a 2007-vintage
vehicle with $406 million.
American Capital, which invests in
mid-size companies, is seeking a junior
stafer to help with portfolio monitor-
ing and deal execution. Focusing on
mezzanine-debt investments, the re-
cruit would work on portfolio-company
refnancings and exits. He or she would
also be expected to perform due-dili-
gence reviews of potential investments,
working in the New York ofce of the
Bethesda, Md., company.