Mark Weisdorf keeps this up, he may get pigeonholed as the guy who builds huge things from scratch. Not a bad label, to be sure.
Weisdorf was recently named global chief investment officer of JPMorgan Asset Management's newly unveiled infrastructure investment group. The firm as yet has no products to speak of, but these are on the horizon and, if Weisdorf matches the track record he left behind at Canada Pension Plan Investment Board, it won't be long before his team has many zeros behind its AUM number.
Weisdorf, a Canadian, was hired in 2000 by ([A-z]+)-based CPP Investment Board, an asset manager for one of Canada's largest pensions, to build out a major allocation to private equity and other alternative asset classes, including real estate and infrastructure. Prior to joining the pension, Weisdorf had worked at HSBC Securities and CIBC Wood Gundy. The pension has an extremely long-term outlook and Weisdorf concluded that a 10 percent allocation to private equity was a good target to begin with.
CPP made its first-ever commitment to a private equity fund in 2001. By the end of 2003, when Weisdorf resigned from CPP, the private equity portfolio had grown to roughly $5 billion, thanks to a steady stream of hefty commitments to private equity funds in Canada, the US and Europe. CPP also backed some innovative deals, putting, for example, €221 million behind the €1.5 billion spinout of MidOcean Partners from Deutsche Bank.
At JPMorgan, Weisdorf will report to Joe Azelby, the global head of real estate within the asset management group. Infrastructure investments – which can include toll roads, pipelines, ports, airports and other essential conduits of commerce – can present very predictable cash flow, and these assets also tend to come with very large price tags, which makes them an ideal place for certain types of investors to park capital.
Last year, Goldman Sachs reportedly began efforts to raise an infrastructure fund of its own with a $5 billion target. This move comes in the wake of Australian bank Macquarie's ongoing and successful campaign of buying up infrastructure assets around the world.
Weisdorf, who has relocated to New York, says his group will initially focus on assets in North America and Western Europe, where the risk/return profile matches most closely what JPMorgan's clients want from the asset class.
QUADRANGLE HIRES HEDGE FUND TEAM
Quadrangle Group is the latest private equity shop to move into the hedge fund arena, as the New York firm announced the hiring of Robert Donahue, the head of media and telecom long/short manager Harpoon Equity Management. Donahue is joining the firm as a managing principal, while his colleagues at Harpoon, Ryan Brown and John Hill, will also be coming aboard as vice presidents. As part of the appointment, Quadrangle is absorbing Harpoon, which will be renamed Quadrangle Equity Investors. “Their strategy fits perfectly with our expertise in the media and communications sectors,” Quadrangle managing principal Steven Rattner said in a statement. “Our complementary businesses and industry knowledge will help us to continue to identify attractive investment opportunities.”
TH LEE PUTNAM SPINOUT ADDS OPERATIONS EXPERTISE
GRS Partners, a recent TH Lee Putnam Ventures spinout, has bolstered its staff with the appointments of four operating partners. The new hires add strength to the firm's financial services and business outsourcing target areas. GRS has recruited Bernie Andrews, a former chief executive of Eyecare Centers of America; Allan Loren, the ex-chairman and CEO of Dun & Bradstreet; Cognizant Technology Solutions founder Kumar Mahadeva; and American Express veteran Phillip Riese. In November, TH Lee Putnam Ventures vets Harvey Golub, Ramanan Raghavendran and Renny Smith splintered away from the Thomas H. Lee tech-focused affiliate to launch GRS Partners.
GENSTAR GRABS FREMONT PRO
San Francisco-based Genstar Capital has poached Fremont Partners' Keith Oster to serve as a managing director. Prior to his employment at Fremont, Oster put in stints at Thomas Weisel Capital Partners, which recently spun out of the investment bank as Tailwind Capital, and JF Lehman & Company. Oster's first job in the industry was at The Carlyle Group. In discussing the new addition, Genstar's Jean-Pierre Conte, the chairman and managing director at the firm, said in a statement: “Keith's expertise in the industrial technology, business services and healthcare services sectors directly relates to the goals and growth strategies of Genstar.”
AIG ENDS FIGHT WITH FORMER EMPLOYEES
American International Group has reached a settlement with Peter Yu and William Jarosz, the former heads of its private equity arm. Yu and Jarosz had headed AIG Capital Partners, the firm's private equity arm, until April 2005, when AIG cut the pair loose. Yu and Jarosz in the following months launched the emerging market-focused Cartesian Group. AIG filed a lawsuit in February against the pair, saying they broke a non-compete clause. Yu and Jarosz claimed they were fired without cause, obviating the noncompete clause. In a release, AIG said it had resolved “all outstanding disputes” between the firm and the former employees.
ROBERT L. JOHNSON RECRUITS TALENT
The billionaire founder of Black Entertainment Television, Robert L. Johnson, has nabbed talent from Parish Capital and Golden Gate Capital to run his private equity and hedge fund groups. Johnson has hired Daphne Dufresne and Alan Nichols as managing directors of RLJ Equity Partners. Dufresne comes to RJL from fund of funds manager Parish Capital Advisors. Dufresne had spent much of her career as a principal at Weston Presidio, based in Boston. Nichols, meanwhile, had previously served under Johnson as an executive vice president and CFO at BET. Prior to the new appointment, however, Nichols had worked as an operating partner at San Francisco-based Golden Gate Capital. The Carlyle Group and RJL recently formed a partnership to co-invest in deals.
VENTURE FIRM SUED BY PORTFOLIO CO EX-CEO
Brad Greenspan, the former head of website company Intermix Media, which owns Myspace.com, is suing the company and its former VC backers, VantagePoint Venture Partners, claiming he was unjustly squeezed out. Myspace, which is among the most-viewed websites in the world, was a bittersweet success for Greenspan, a founder who was pushed out in 2003. He has filed a lawsuit claiming he was foiled in his attempts to “protect company shareholders from a predatory and dilutive stock investment” from its venture capital backers. Following his ouster, Intermix accepted a merger with News Corp. VantagePoint made a reported 9x return on its Intermix investment.
GROSS TO LEAVE APOLLO FOR “ENTREPRENEURIAL” VENTURE
Michael Gross, one of the founders of New York private investment giant Apollo Management, will step down from the firm to pursue his own firm. In addition to helping to found Apollo, which recently raised more than $10 billion for its new fund, in 1990, Gross helped launch Apollo Investment, a publicly traded business development company. The BDC executed an IPO in 2004, raising $930 million and launching a number of ultimately unsuccessful similar attempts from other private equity firms. Gross is seen as possessing private equity and credit market experience, as well as public company managerial experience, that place him in a position to benefit from the ongoing convergence of private equity and hedge funds. A source familiar with his move says he has “entrepreneurial juices flowing”.
PRICE TO REDUCE ROLE AT TEXAS PACIFIC
Texas Pacific Group co-founder Bill Price will not participate as a general partner in the firm's next fund, expected to be among the largest ever raised. A spokesman for Texas Pacific said Price will remain active in the firm's San Francisco office, but his role will primarily be focused on overseeing existing portfolio companies. David Bonderman and Jim Coulter are the two remaining co-founders of Texas Pacific Group who will remain in the general partnership. The firm is also reportedly looking to raise $1 billion for a new distressed debt vehicle.