REAP WHAT YOU SOW

New York-based Shermen Capital Partners recently launched a SPAC to capitalise on what it maintains is an untapped market: the $271bn US agriculture industry.

Few are those with farming backgrounds on Wall Street – a fact that agriculture-focussed Shermen Capital Partners says puts it head and shoulders above other private investment firms.

“As far as our industry, we know it from the ground up, no pun intended,” says Francis Jenkins, chairman and chief executive of Shermen Group, which also has a real estate arm.“We've walked the fields and know the farmer at the farm gate and feel that's very important.”

Shermen is led by the former management team of Royster-Clark, a fertiliser and agricultural inputs company that was sold to publicly traded Agrium for $515 million (€346 million) in 2006. Jenkins, Royster-Clark's former chairman and CEO, went on to form Shermen Capital Partners with former colleagues and finance professionals.

In May 2007 the firm raised an agriculture-focussed fund in the form of a special purpose acquisition vehicle (SPAC). Its offering was 1.5 times oversubscribed and raised $138 million. The vehicle, Shermen WSC Acquisition Corp, currently trades on the Over the Counter Bulletin Board and had a market cap of $161 million at press time.

“We felt strongly the SPAC offered a lot of different things, one of which is you've got money in your bank account [whereas with] a 144A you're going in saying ‘woulda shoulda coulda’,” Jenkins says. “With the credit crisis that is here now and is only going to get worse, having money in the bank is a pretty good lightening rod.”

As is investing in an industry dealing with succession issues, particularly with regard to family-owned businesses, while at the same time poised for exponential growth, he says.

“We're consuming more food than we have the ability to produce,” Jenkins notes. “You put on top of that consumption extra demand from ethanol, which has taken 30 percent of the corn crop, [and] that's pretty significant”.

The US Department of Agriculture has projected agriculture will be a $313 billion industry by 2015, equivalent to an annual compounded growth rate of 1.3 percent, and with extra attention on ethanol as a replacement for petrol, the industry's repute has grown.

The Shermen SPAC intends to purchase an operating business with an enterprise value of $100 million to $500 million, which will act as a platform for consolidation. Among the sub-sectors it will examine for potential investments are: agricultural equipment; livestock feed and animal health products; farm and crop management; agriculture industry support services; product manufacturing; and product distribution.

LIGHTYEAR RECRUITS GOLDMAN PARTNER
Lightyear Capital has hired senior Goldman Sachs partner Chris Casciato to originate and execute investments for its second financial services-focussed buyout fund, which closed last March on $850 million. The 49-year old Casciato was at Goldman for more than 20 years. He was most recently a partner in the bank's Financial Institutions Group, before which he held roles including global chief operating officer of investment banking, group head of Latin America investment banking, COO of Goldman Sachs India and COO of the real estate department.

MOELIS ADDS FORMER CCMP PRINCIPAL
Moelis & Company has hired former CCMP Capital Advisors principal Stephan Oppenheimer as a partner. At CCMP, Oppenheimer worked in the media and telecom, services and industrial sectors. Before joining CCMP, Oppenheimer was an investment banker at Chase Securities. Prior to that, he was a systems consultant at American Management Systems and System Planning Corporation. Oppenheimer's hire brings Moelis & Co's roster to 45, just six months after the firm was founded by former UBS head of investment banking Ken Moelis. The firm held a first close on $1.8 billion for its debut fund last September.

CISCO EXEC GIANCARLO JOINS SILVER LAKE
US technology-focussed private equity firm Silver Lake Partners has hired Charles Giancarlo, former chief development officer at communications and IT company Cisco Systems, as a managing director. Giancarlo first joined Cisco in 1993 when it acquired ethernet switching company Kalpana, where he was vice president of marketing and corporate development. He joined Cisco as vice president of business development, where he oversaw the company's merger and acquisition strategy. Before joining Kalpana, he co-founded Adaptive Corporation, which developed products for the local area network (LAN) market. He also founded four companies in communications equipment, two of which were later sold to corporations.

CARLYLE HIRES US RESEARCH HEAD
The Carlyle Group has hired Steve Sterling as a managing director and head of the research team for its US leveraged finance group. Sterling was most recently a senior managing director in the high yield capital markets and loan sales division of Bear Stearns. Before that, he worked in leveraged credit at Lehman Brothers and Bank of America. He will be based out of Carlyle's New York office.

LITTLEJOHN PROMOTES MD
Mid-market private equity firm Littlejohn & Co. has promoted Steven Raich to managing director. Raich joined Littlejohn in 2000 and became a principal in 2006. Raich came to Littlejohn from Golub Capital, having also worked at Ernst & Young in the mergers and acquisitions advisory services group.

MAVA ELECTS BURTON AS PRESIDENT
The Mid-Atlantic Venture Capital Association (MAVA) has elected John Burton, co-founder and general partner of Updata Partners, as its next president. Updata invests in high-growth software and software-enabled technology companies, and manages around $500 million in venture funds. The firm's fourth fund closed on $225 million last November. Burton held a variety of executive positions at IT companies for more than 30 years. He was formerly chief executive of Legent Corporation, and co-founder of Business Software Technology.

COLONY HIRES FORMER AMGEN EXEC
Colony Capital has hired Richard Nanula to join the firm as a principal reporting to chairman and chief executive Thomas Barrack. Nanula will play a senior role in the firm's global operations and will be based at the firm's Los Angeles headquarters. Nanula was previously executive vice president and chief financial officer of biotechnology company Amgen. Prior to joining Amgen, Nanula was president and chief operating officer for Starwood Hotels and Resorts in New York, as well as senior executive vice president and chief financial officer at the Walt Disney Company.

MA SWAPS 3I FOR BRAEMAR
Braemar Energy Ventures has hired Jiong Ma from global investment firm 3i. Ma joined 3i in 2004 as a part of the Kauffman Fellowship Programme, a two-year apprenticeship programme run by the Center for Venture Education, in which young professionals interested in a career in the industry receive specialised training while working full time at a venture firm. At 3i, Ma focussed on the firm's IT and cleantech portfolio, working closely with online storage provider Carbonite, advanced plastics developer Konarka and project organisation software maker OpenAir. Before joining 3i, she held high level positions at Lucent Technologies and Bell Labs, working on product strategy, product launches for optical and data networking, mergers and acquisitions and research and development. At Braemar, Ma will look for companies that develop and commercialise energy technologies, including intelligent networks, energy efficiency, energy storage, pollution control, advanced power generation and clean fuels.

DOUBLE HIRE FOR CARLYLE VENTURE GROUP
The Carlyle Group has expanded its West Coast venture and growth capital team with the hire of two new managing directors, Nick Sturiale and Greg Rossmann. Sturiale was previously a managing director at Sevin Rosen Funds and Rossman was previously a managing director at Pequot Capital. Sturiale joined Sevin Rosen in 2000, and worked closely with portfolio companies YouSendIt, a web-based file transfer service, and Sonopia, a service that allows users to create independent mobile phone carriers. Sturiale was also involved with the seed round of investing for open source company XenSource, which was sold to software company Citrix in 2007 for $500 million. As first reported by sister website PEO last November, the California partners of Sevin Rosen's venture arm decided to split with the firm to pursue different investment practices, ahead of fundraising for the firm's tenth fund. Rossman joined Pequot Capital in 2000 after working as a managing director at Broadview Capital and holding executive and engineering positions at Acterna Corporation and Advanced Micro Devices. At Pequot, he led investments in Amber Networks and GCT Semiconductor, among others.