Americas – January 2004

Americas 2004-01-01 Staff Writer <strong>America<br> Monitor</strong><br> <sec level="2"><strong>Woman of action</strong><br> <bold>The outspoken and combative treasurer of Connecticut, Denise Nappier, has been at the center of a flurry of legal action


Woman of action
The outspoken and combative treasurer of Connecticut, Denise Nappier, has been at the center of a flurry of legal actions against private equity firms accused of mishandling state funds. David Snow reports on the woman whose sword of fiduciary duty has many general partners on the defensive.

Most private equity investment partnerships are carefully worded so as to prevent a GP group from being fired merely for investing poorly. Before limited partners may seek redress, most partnership agreements require that, at the very least, GPs be found to have breached their fiduciary duties in managing the fund.

Just what a breach of fiduciary responsibility is has rarely been defined for private equity industry participants. This is a market where investors seldom publicly criticise their fund managers – even for egregiously bad judgment – for fear of gaining a reputation as a “difficult investor.” Denise Nappier, for one, the first African-American woman elected to a statewide office in Connecticut, couldn’t care less about this label.

As evidenced by her very public criticisms of, and legal actions against, a number of private equity firms, the treasurer has clearly shown she is not aiming for a next career in the asset class, unlike many of her peers at other public pensions. Nappier, who last year was re-elected to a second four-year term as treasurer, is reportedly considering running for governor of Connecticut, and is using her platform as the overseer of public employees’ retirement funds to demonstrate a willingness to fight for what she thinks is right for the state.

Fiduciary duties
Part of this fight includes an attempt to prove that Forstmann Little & Co., the mighty New York buyout firm, did in fact breach its fiduciary duty in addition to simply losing Connecticut’s money in telecom debacles XO Communications and McLeodUSA. This is a battle that other LPs in Forstmann funds are watching with keen interest. But they are happy to let Nappier lead the charge alone.

Early last year, Nappier sued Forstmann Little, led by buyout legend Ted Forstmann, for what she called “breach of fiduciary responsibilities, breach of contractual obligations, and violations of securities law.” In an announcement, Nappier said that the buyout firm had “cheated Connecticut workers and retirees of their hard earned pension money,” “enronised Connecticut,” and “doublecrossed” the state. GPs won’t hear that kind of language from limited partners at their next annual meeting.

Forstmann Little claims it merely made bad investments. Nappier says it made investments not permitted by its partnership agreement. According to a source close to the treasurer’s office, the case will be heard in Connecticut Superior Court in May. Already, people connected to the dispute are being deposed, the source added.

When not pursuing billionaires, Nappier has dedicated enormous energy to shaking up private equity relationships that she sees as not advantageous to the state. A year ago, she forced Dallas fund of funds manager The Crossroads Group to return $297.5m in distributions that she argued were being improperly withheld from her plan.

More importantly, the treasurer has also gone after investment firms that did questionable deals with her predecessor, Paul Silvester, who last month was sentenced to four years in prison for corruption while overseeing state funds. Triumph Capital, a Boston firm whose founder, Fred McCarthy, pleaded guilty to criminal gratuity in his relationship with Silvester, is attempting to roll Connecticut’s remaining $95.4m into a successor fund following the dissolution of Triumph. “That’s not enough,” retorted Nappier. “We won’t do business with them or any firm created solely to provide the illusion of change.”

In an October 10 press release, titled “Nappier steps up criticism of investment firm,” the treasurer announced she would unleash a number of actions against Pioneer Ventures, another firm that had dealings with Silvester, and one which had already agreed to reduce the state’s $75m commitment. “We have known for some time that the fund was replete with bad investments and poor decisions,” Nappier wrote, “but we are now extremely concerned that the activities may have even more ominous implications.”

In September, Nappier asked the US Attorney’s office and the SEC to confirm whether Pioneer was the subject of a criminal investigation. If not, Nappier added, it should be.

She was criticised by Connecticut governor John Rowland for her dogged pursuit of Pioneer. Among the firm’s partners is a personal friend of Rowland’s. It has been reported that it was the governor who originally brought Pioneer’s fund to Silvester’s attention.

In a related press release, whose title included the line “Fraudulent actions suspected,” Nappier announced she launched an investigation into Philadelphia firm Keystone Venture Capital, which also benefited from a Silvester commitment on his way out of office. “It appears that another bad apple has fallen from the poison tree,” said Nappier in the statement.

The release noted that immediately upon assuming office in 1999, Nappier demanded that Keystone reduce Connecticut’s $27.5m commitment to a fund managed by the firm, a demand that Keystone “flatly refused,” this despite the fact that “numerous other private equity firms did agree to Nappier’s request for voluntary reductions” to the tune of $161.5m.

When Nappier makes a request of her GPs, they have learned that she is one LP who won’t take no for an answer.

Deals & Exits

Apollo buys ConAgra unit
New York-based private equity firm Apollo Management has agreed to acquire the crop protection chemical division of ConAgra Foods for approximately $600m.

The purchase price will include approximately $160m in equity, including $120m from Apollo and the management team and $60m of seller preferred stock held by ConAgra. The rest of the transaction will be financed with an asset-based credit facility and the issuance of notes, according to a press release.

The division purchased, known as United Agri Products, distributes crop protection chemicals, fertilizers, seed and other noncrop products throughout North America. The division had sales of $2.5bn in the fiscal year ended February 2003. The company is led by chief executive officer Kenny Cordell.

TD Capital to buy CINAR for $144m
TD Capital Canadian Private Equity Partners is teaming with two family entertainment entrepreneurs to purchase CINAR Corp, a provider of children’s education and entertainment products, for $144m.

TD Capital Canadian, a fund established by Toronto-based private equity firm TD Capital, joins Michael Hirsh and Toper Taylor on the deal. Hirsh and Taylor were founder and president of distribution, respectively, of Nelvana. Hirsch also co-founded Teletoon. TD Capital Canadian’s Joe Wiley led the deal for the firm.

Kenner exits Therma-Tru
New York-based private equity firm Kenner & Co has agreed to sell door maker Therma-Tru to publicly traded Fortune Brands in a deal worth $925m.

The transaction will be a combination of cash and assumed debt. Kenner had originally acquired the company in May 2000, in a leveraged recapitalization that gave the firm a 50 per cent stake. The Welles family, which founded Therma-Tru in 1962, retained a 44 per cent stake.

The firm also agreed to buy window maker Atrium Cos. from a consortium in a $610m deal. The sellers of Atrium include GE Asset Management, Merrill Lynch Capital Corp. and Connecticut-based private equity firm Ardshiel. In a conference call, Atrium president and CEO Jeff Hull said the group will collect $209m for their stock, of which GE, the largest contributor to the 1998 buyout of Atrium, will receive $150m.

Bear Stearns acquires hydration system business
New York-based Bear Stearns Merchant Banking, the private equity arm of financial services firm Bear, Stearns & Co, has agreed to acquire hydration backpack manufacturer CamelBak in a deal valued at $210m. Exact terms of the all-cash transaction were not disclosed.

CamelBak makes backpacks with ‘bladders’ that can be filled with water or other fluids. The backpacks are used by outdoors enthusiasts, athletes, the military and industrial professionals, such as forest firefighters. The company was formed in 1989.

Bear Stearns acquired the company from its owners, the Bowes family of San Francisco. It will remain based in Petaluma, California.

Wind Point returns $377m via two exits
Michigan-based private equity firm Wind Point Partners sold packaging company Alloyd Company to SCA North America for $97m.

Alloyd is a manufacturer of light-gauge custom thermoformed retail and medical packaging, and also specialises in blister packaging machines and seal tooling. The company has manufacturing sites in the US, Puerto Rico and Mexico.

The firm also sold frozen bakery products company Bakery Chef to strategic buyer Ralcorp for $287.5m. Bakery Chef manufactures frozen griddle products such as waffles, pancakes and French toast. The company also makes frozen pre-baked muffins, biscuits, rolls and breads sold through the food service channel. The company had $165m in sales in 2002 and employs 800 people.

Brazos acquires Cheddar’s restaurant chain
Dallas-based private equity firm Brazos Private Equity Partners has acquired casual dining restaurant chain Cheddar’s. Terms of the deal were not disclosed.

Cheddar’s has 18 company-owned locations in five states and 24 franchise locations in ten states. Cheddar’s menu focuses on casual fare, such as hamburgers, ribs, chicken sandwiches and salads. The company has revenues of more than $150m and is led by chief executive officer Aubrey Good.

TPG buys Kraton Polymers in $770m deal
Texas-based private equity firm Texas Pacific Group has acquired specialty chemical company Kraton Polymers from New York-based private investment firm Ripplewood Holdings in a deal valuing the company at $770m. Ripplewood acquired Kraton from Shell Chemicals in 2001 for more than $500m. Kraton is the world’s largest producer of styrenic block copolymers, which are used in adhesives, sealants, footware, personal hygiene products and packaging. The company has manufacturing facilities in Ohio, The Netherlands, Japan, Germany, France and Brazil. The company’s revenues exceed $600m annually.

In a separate deal, TPG has agreed to buy Portland General Electric from Enron through its portfolio holding company Oregon Electric Utility Company in a transaction valued at $2.35bn.

The price tag includes the assumption of debt, with the final amount to be determined based on PGE’s financial performance numbers at the close of the 2003 fiscal year. Oregon Electric will assume all outstanding shares of PGE, giving the company full control.

The deal is expected to close in the second half of 2004, following the approval of state and federal regulatory agencies.

General Atlantic invests $125m in Archipelago Exchange
Connecticut-based General Atlantic Partners has invested $125m for a minority stake in allelectronic stock exchange Archipelago Exchange. Terms of the investment were not disclosed. Archipelago Exchange is the world’s largest all-electronic stock exchange. The exchange features a trading system that employs an algorithm to search for the best execution for each order. The market trades stocks on the New York Stock Exchange, Nasdaq and the American Stock Exchange. It is regulated by the Pacific Exchange. Archipelago was one of the original four ECNs created in 1996.

Fenway Partners exits Simmons
New York-based private equity firm Fenway Partners announced it has agreed to sell mattress company Simmons Co. to Boston-based Thomas H Lee Partners in a transaction valuing Simmons at approximately $1.1bn.

Terms of the deal were not disclosed, according to a press release. The transaction is expected to close by the end of the year. Fenway will retain a ten per cebt stake in Simmons.

Simmons is a manufacturer and distributor of premium bedding products including mattress brands Beautyrest, Olympic and Deep Sleep.

Fenway acquired Simmons in 1998 from private equity firm Investcorp in a $513m deal. Investcorp acquired Simmons from Merrill Lynch Capital Partners and Simmons’ management for $250m.

Charterhouse leads $180m add-on investment for AAT
New York-based private equity firm Charterhouse Group has joined with two other private equity firms and a media holding company to invest $180m in Charterhouse portfolio company AAT Communications, a cell phone tower owner and operator.

Other entities involved in the investment include private equity firms Sandler Capital Management and WallerSutton as well as media conglomerate The Oklahoma Publishing Co. Terms of the investment were not disclosed.

AAT Communications was founded in 1950 and is a privately held provider of wireless tower sites. The company serves wireless carriers and offers sitemanagement services. Charterhouse is the company’s largest shareholder having originally invested in 1998.

In May 2002, Charterhouse teamed with telecommunications executive Jerry Kent and his management company, Cequel III, to add $100m to AAT Communications. As part of the transaction, Cequel III took over management services to AAT.

Funds & Buyside

HarbourVest, UBS in $1.3bn secondary deal
Boston-based private equity firm and investment advisor HarbourVest Partners has teamed with global financial services giant UBS on a ‘structured secondary’ joint venture that sees HarbourVest acquire a percentage of UBS’ private equity portfolio. Both firms will operate the joint venture, according to Fred Maynard, a managing director at HarbourVest.

Exact terms of the deal were not disclosed. UBS has approximately $1.3bn in 50 limited partnership commitments to private equity firms. “We aren’t buying and walking away,” Maynard said. “We will be working with UBS for some years to come on this joint venture. We didn’t buy Y percentage to get Y cash flows. The cash flows are shared but we did buy into a deal that has a potentially attractive return for us.”

Maynard added that the nature of the joint partnership is such that both firms will profit from the success of the investments.

In October, HarbourVest announced it promoted Brett Gordon and Mary Traer to principal from vice president in a spate of promotions. The firm also announced it promoted Hannah Tobin, Scott Voss and Christopher Walker to vice president from senior associate; Brian Buenneke, John Fiato and Jeffrey Keay to senior associate from associate; and Corentin du Roy, Clayton Gran and Peter Marmer to associate from investment analyst.

Gores closes debut thirdparty fund on $400m
Los Angeles-based private investment firm Gores Technology Group has closed its debut third-party private equity fund on $400m.

Gores Capital Partners began fundraising approximately 12 months ago and will continue the firm’s strategy of investing in technology and telecommunications businesses. Gores typically focuses on control-oriented buyouts in the software, computer hardware, computer services, and telecommunications industries.

“Gores Capital Partners is a strategic and logical next step for us,” Alec Gores, founder and chairman of Gores Technology Group, said in a statement. “We raised the fund in order to further institutionalise our firm, as well as broaden our capital base for larger transactions.”

Prior to raising a third-party fund, Gores Technology primarily invested the capital Alec Gores received after selling a software company to Continental Telephone.

CMEA Ventures secures $70m at first close
San Francisco-based venture capital firm CMEA Ventures announced a first close of $70m on its new fund, CMEA Ventures VI.

CMEA is seeking a target amount of $250m. The fund will be used to invest in high technology and life sciences ventures, focused on four sectors: semiconductors and high-performance electronics; enterprise productivity software and services; drug development; and pharmaceutical chemistry.

CMEA VI will be managed by Baruch, David Collier, Karl Handelsman, Gordon Hull, Faysal Sohail, James Watson and Andrea Tobias. According to a statement, commitments to the fund came primarily from existing limited partners, including institutional investors, individuals and Fortune 100 companies.

CMEA invests in both early and late stage companies, and actively partners with an extended network of companies, other VC firms, institutional investors, strategic partners as well as entrepreneurs. The firm was originally formed as an affiliate of New Enterprise Associates (NEA) in 1989 and became independent in 1997. CMEA currently has five funds and manages $500m.

Ventures West holds first close on C$158m
Vancouver-based venture capital firm Ventures West Management held a first close of Ventures West 8 on C$158m ($120m).

The fund, which according to a statement is the largest one raised in Canada this year, will focus on early stage biotechnology, communications, energy technology and IT companies based in Canada. Ventures West has not set a definite target for the fund, though it expects to raise approximately C$200m ($152m) and close during the first half of 2004, according to the firm’s spokesperson.

Investors in the fund include British Columbia Investment Management Corporation, Business Development Bank of Canada, EdgeStone Capital Partners, OMERS, and Teachers’ Merchant Bank, the private equity arm of the Ontario Teachers’ Pension Plan.

New investor Canadian Pension Plan Investment Board (CPPib) invested C$50m ($38m) into Ventures West’s new fund, making it one of the firm’s largest investors, according to the spokesperson.

GTCR Golder Rauner closes fund VIII on $1.85bn
Chicago-based private equity firm GTCR Golder Rauner has closed its eighth fund on $1.85bn. The fund, GTCR Fund VIII, had an original target of approximately $2bn. The firm’s seventh fund closed in 2000 on $2bn.

Fund VIII has already made investments in four companies. The fund will continue GTCR’s strategy of partnering with established industry veterans and backing them in new ventures.

One of the fund’s investments was a $200m commitment to launch Fairmount Food Group, a conglomerate focused on acquiring food and beverage companies in growth segments of that industry. The firm backed Bing Graffunder, who became chief executive officer of Fairmount.

EdgeStone Capital Partners closes second fund on C$361m
Toronto-based private equity firm EdgeStone Capital Partners has completed fundraising for EdgeStone Capital Equity Fund II LP on C$361m ($271m).

The later-stage private equity fund focuses primarily on the Canadian mid-market and is more than double the size of its predecessor fund.

The fund makes investments between C$15m and C$40m ($11m and $30m) in equity and equity-related securities of mid- and laterstage private and public companies in a broad range of industries. Capital is used for growth and expansion, acquisitions, consolidations and restructurings. According to the statement, EdgeStone has already made three investments from the fund totalling C$80m.

The fund is managed by Duboc, chief operating officer and managing partner Gilbert Palter, and partners Guthrie Stewart and Alan Sellery.

EdgeStone changed its name from NB Capital Partners in February after a management buyout. The firm was founded in 1999 as an affiliate of National Bank Financial, the investment dealer subsidiary of National Bank. EdgeStone is now majority owned by its management team, with minority stakes owned by National Bank Financial and the Canadian Pension Plan Investment Board.

Swander Pace closes oversubscribed fund on $325m
San Francisco-based private equity firm Swander Pace Capital has closed its third private equity fund at $325m, surpassing its original $300m target. Investors in the SPC Partners III LP fund include New York Life Capital Partners, Allianz Private Equity Partners, Duke University and PPM America.

Swander Pace invests exclusively in consumer products companies with up to $250m in revenues, according to the firm’s website. The third fund will seek investments of $15m to $25m for each deal.

Fundraising for the third fund began in February. Swander Pace’s previous fund closed in September 2000 on $220m.

Some of Swander Pace’s food holdings include Mrs Fields Original Cookies and spiced tea distributor Oregon Chai. The firm also owns Isotoner Corp, a maker of gloves and umbrellas. In August 2002, Swander Pace bought Fleischmann’s Vinegar Company from Australian yeast and natural food ingredients manufacturer Burns, Philp & Co for A$88m ($48m).

Swander Pace Capital targets manufacturers, marketers and Internet companies across a wide variety of consumer sectors and specializes in leveraged acquisitions, recapitalizations, turnarounds, and roll-ups. The firm currently manages more than $600m in capital and has participated in more than 50 consumer company investments. It maintains a proprietary partnership with Swander Pace, a strategy-consulting firm dedicated to consumer companies.

Midwest trio found Stone Arch Capital
A trio of investment professionals has formed Stone Arch Capital, a leveraged buyout firm that will focus on the acquisition of middle market companies in the Midwestern region.

The new firm, headquartered in Minneapolis, was founded by Peter Grant, who in July resigned as US chairman of corporate and investment bank RBC Capital Markets, based in Toronto; Charles Lannin, former general partner at Minneapolis-based Norwest Equity Partners; and Mark Michaels, former partner at Crossroads Capital and Willis Stein, both located in Chicago.

“With the formation of Stone Arch, we are focusing on acquisitions that we know best – solidly performing companies located in the heartland,” Lannin said. “Our goal is to find solid, high quality companies that we can grow and improve with existing management. We’ll be looking for companies with revenues in the $20m to $150m range that have demonstrated a history of consistent earnings.”

According to a statement, Stone Arch is actively pursuing several transactions in the lower middle market ranging between $20m and $100m. Sectors will include a variety of manufacturing and service industries, excluding real estate, technology and commodity oil, according to the firm’s website. Stone Arch has also organized an advisory council comprised of Midwestern and national business leaders, including Doug Steenland, president of Northwest Airlines.


Weisdorf resigns post at CPP, Kester to leave Colorado PERA
Two prominent heads of private equity investment for the Canada Pension Plan Investment Board and Colorado’s Public Employees’ Retirement Association – respectively, Mark Weisdorf and Kevin Kester – are resigning, signaling a new wave of turnover among prominent limited partners.

In a brief announcement, Toronto-based CPP Investment Board said Weisdorf had resigned his post as vice president of private market investments to “pursue other interests.” The statement cited “differences in management philosophy.”

A spokesperson for CPP Investment Board declined to elaborate on the reasons for Weisdorf’s departure, but said they were unrelated to performance or strategy. “Private equity remains an important part of our portfolio and our long-term strategy,” the spokesperson said.

Weisdorf is an outspoken proponent of transparency in private equity, and CPP Investment Board is among a small handful of LPs that requires its general partners to agree to make IRR data publicly available. The spokesperson said Weisdorf’s resignation was not related to this disclosure policy.

Meanwhile, Kevin Kester, the director of alternative investments for Colorado PERA, has resigned his post to become vice president of capital markets for The Broe Companies, a Denver-based closely held company. Broe primarily operates railroad, transportation, senior housing, commercial real estate and medical device businesses. The company is affiliated with Denver’s Broe family.

At Broe, Kester will oversee the company’s development as it taps new sources of capital for its business. “They’ve only once used third-party capital and want to grow their asset base,” said a person familiar with the situation.

Kester recently stepped down as the chair of ILPA’s program committee, replaced by Mark Wiseman, the director of the Ontario Teachers’ Merchant Bank.

Eugene Kleiner, co-founder of Kleiner Perkins, dies aged 80
Eugene Kleiner, a co-founder of Kleiner Perkins Caufield & Byers, widely viewed as the most successful and prestigious venture capital firm in the US, has died in his Los Altos Hills, California, home, of heart failure. He was 80. Kleiner joined forces with Tom Perkins in 1972 to found one of the earliest venture capital firms in what became known as Silicon Valley. The firm’s debut fund raised $8.5m. In June 2000 the firm raised a $1bn fund thanks to its long history and investment successes such as Intel, Genentech and Tandem Computers (later Compaq).

Prior to forming Kleiner Perkins, Kleiner co-founded Fairchild Semiconductor, which pioneered the production of silicon transistors at the cusp of the computing revolution.

Kleiner was born in Austria, but fled the country in 1938 aged 15. Two years later, his family relocated to the US, where Kleiner received a Bachelor of Science degree in mechanical engineering from the Polytechnic University of New York and a Master of Science Degree in Industrial Engineering from New York University.

Kleiner worked for a time at Shockley Transistor, but in 1957 left with a group of other engineers to found Fairchild, applying what he saw as a superior technology. Kleiner was an early investor in techfocused investment bank, Robertson Stephens & Co. He met Perkins, whose knowledge of the computer industry matched Kleiner’s expertise with semiconductors, and their firm became one of the best places for entrepreneurs to get both capital and sage advice.

Fidelity Biosciences Group names new president
Boston-based Fidelity Biosciences Group, the private equity arm of Fidelity Investments focused on biotechnology, announced the appointment of Stephen Knight as president.

Since November 1999, Knight has served as president and chief operating officer at EPIX Medical, which develops speciality pharmaceuticals for magnetic resonance imaging. He will remain with EPIX pending the approval of the company’s MS-325 drug by the US Food and Drug Administration. A Fidelity spokesperson said Knight will join full-time sometime next year.

Knight will succeed Mark Peterson, a 16-year veteran of Fidelity Investments who helped establish Fidelity Biosciences Group in early 2002, according to the spokesperson. The group currently has no standalone fund, and receives capital for investing on a deal-bydeal basis from the parent company

Ventures West names new partner
Vancouver-based venture capital firm Ventures West Management announced the hire of David Berkowitz as a partner. Berkowitz originally joined Ventures West in 1996 and led the firm’s energy technology investment team as a senior vice president.

Berkowitz currently serves as a director on multiple boards, including the British Columbia Technology Industry Association, the Vancouver Enterprise Forum and Angstrom Power.

Canaan Partners adds venture partner
Connecticut-based venture capital firm Canaan Partners has hired Skip Glass as a venture partner. Glass will focus on infrastructure software and services from the firm’s Menlo Park offices.

Most recently, Glass served as chief executive officer of uRoam, formerly known as Filanet, which was acquired by F5 Networks in July 2003. uRoam, which specializes in network applications, had received venture capital financing from Canaan Partners in the past. Prior to uRoam, Glass served as venture partner at Lightspeed Venture Partners, another investor in uRoam. At Lightspeed, he focused on investments in software and e-commerce. Glass had come to Lightspeed from Netscape Communications, where he served as senior vice president of strategic relationships.

Veronis Suhler Stevenson promotes managing director
New York-based Veronis Suhler Stevenson Partners, the private equity arm of media merchant bank Veronis Suhler Stevenson, has appointed Kevin Waldman as managing director. Waldman joined VSS in 1996 from JP Morgan, and was promoted to director in 1999. At VSS, Waldman has been involved in a variety of transactions and helps originate, execute and monitor VSS investments, including User Friendly Phone Book, GoldenState Towers, Birch Telecom and Spectrum Resource Towers.

Axiom hires IT specialist as partner
US venture capital firm Axiom Venture Partners has hired William Wilcoxson as a partner. Wilcoxson, a 13-year venture capital and private equity veteran, joins the firm after serving as general partner of Boston-based venture capital firm Claflin Capital Management, where he focused on early-stage information technology companies. Prior to that, Wilcoxson was a member of IT company Internet Capital Group’s investment team. He also had stints with GE Capital’s corporate finance group and the Massachusetts Technology Development Corporation.

Russell Epker, co-founder of Berkshire Partners, dies at 61
Russell Epker, a co-founder of Boston buyout firm Berkshire Partners, passed away aged 61 from complications with cancer. In 1986, Epker was one of the five founders of Berkshire, now a major private equity firm with $3.5bn in assets and commitments under management. In 2001, Berkshire raised its sixth fund with commitments of $1.7bn.

According to Kevin Callaghan, a managing director at Berkshire, Epker was instrumental in the investment successes of Berkshire, but was also a key figure in the Boston private equity community when it came to raising money for charitable causes. Epker served as chairman of the board of the Boys & Girls Club of Boston as well as the vice chairman of the board of the United Way of Massachusetts Bay, among other non-profit organizations. Callaghan says Epker created a private equity donors’ circle within the United Way that became the most successful industry group to the charity in terms of donations.

Kent Kresa joins Carlyle as senior advisor
Washington DC-based private equity giant Carlyle Group announced that former Northrop Grumman Corp chief executive officer and chairman Kent Kresa has joined the firm as a senior advisor. Kresa will work in one of Carlyle’s most well known divisions, its aerospace and defence group.

Kresa was chairman of Northrop Grumman’s board of directors from 1990 until last month. He served as the company’s chief executive from 1990 until March 2003. He was a group vice president in the company’s aircraft group in 1982 and a senior vice president of technology development and planning in 1986. He joined the company in 1975. In the late 1970s and early 1980s, he led the Ventura division, which produces unmanned aeronautical vehicles.

Flagship hires pharmaceutical partner
Cambridge, Massachusetts-based Flagship Ventures has added L Patrick Gage as a venture partner in its life science team. Gage will focus on locating drug discovery and drug development ventures and working with the management teams of these companies. For the past 30 years, Gage has held top positions in the pharmaceutical and biotechnology sectors. Most recently, he served as the president of global pharmaceutical company Wyeth Research, as well as the senior vice president of its Science and Technology division. In 1989, Gage joined Genetics Institute, where he became research and development head and was subsequently promoted to chief operating officer. He became president of the company in 1997 after American Home Products Corporation acquired Genetics Institute.

HarbourVest promotes two to principal
Boston-based private equity firm HarbourVest Partners promoted Brett Gordon and Mary Traer to principal in a spate of promotions. Gordon and Traer previously served in the role of vice president, according Kerry Fauver, a spokesperson for HarbourVest.

The firm also announced it promoted Hannah Tobin, Scott Voss and Christopher Walker to vice president from senior associate; Brian Buenneke, John Fiato and Jeffrey Keay to senior associate from associate; and Corentin du Roy, Clayton Gran and Peter Marmer to associate from investment analyst. Fauver added that this round of promotions follows the firm’s yearly review process where the firm analyzes its staff and promotes those people deemed worthy.