Many in the private equity industry have long complained that no readily accessible, authoritative data exists on performance in the private equity asset class. The fund administration arm of financial services provider State Street is hoping its new product will be the answer to many performance data prayers.
State Street's Private Edge Group has launched a product called the State Street Private Equity Index which aggregates information on more than 1,300 partnerships with total assets under management totaling more than $1 trillion (€680 billion).
The analysis is culled from Private Edge's client base, which represents more than 4,000 commitments totaling over $150 billion.
In a statement announcing the index launch, Chris Ailman, chief investment officer of the California Teachers' Retirement System, said: “The industry has long awaited a third party private equity index based on consistent and reliable data. State Street's index will be a tremendous asset in evaluating our holdings, which will provide us the information necessary to make strategic business decisions.”
In launching the performance index, State Street will be competing directly with Venture Economics, a division of Thomson Financial and the longstanding provider of private equity performance information. Venture Economics relies on data voluntarily submitted by GPs. Sceptics question whether the voluntary submission approach results in a representative sample of the overall market.
As of June 30, the State Street Private Equity Index was comprised of data on 586 buyout funds, 567 venture capital funds and 156 “other” funds.
The Index includes vintage-year breakdowns of performance data, as well as data grouped by geographic target, investment stage, fund size and quartile.
GE VETS RAISE $500M FOR INDUSTRIALS
GenNx360 Capital Partners has raised $500 million (€338 million) for its debut fund, which will target underperforming industrial business-to-business companies with revenues between $250 million and $1 billion. It will target industries including: water treatment; specialty chemicals and engineered materials; industrial machinery and equipment components; global transportation component parts and services; industrial security services; and business services. The firm was founded in 2006 by Arthur Harper, former president and chief executive of GE Equipment Services, and Ronald Blaylock, who founded investment banking boutique Blaylock & Co in 1993. GE vice chairman Lloyd Trotter plans to join the firm next month after his retirement from GE, which is reportedly an investor in the fund.
EX-PCG PRO RAISES $435M DISTRESSED FOF
Drum Capital Management has closed a $435 million (€295 million) fund of funds dedicated to the distressed and turnaround space. The firm has made allocations to Sun Capital Partners, MHR Fund Management and Wayzata Investment Partners, among other firms in the distressed space. Based in Norwalk, Connecticut, Drum Capital is led by Scott Vollmer, who left La Jolla, California-based advisory firm Pacific Corporate Group in 2005. Prior to joining PCG, Vollmer was head of credit strategies at Commonfund, an asset manager for university endowments. Vollmer continues to oversee a distress-focussed fund of funds raised at Pacific Corporate Group that drew roughly $350 million in commitments. Champlain Advisors acted as exclusive placement agent for the Drum Capital fundraise.
MONTREUX CLOSES FOURTH LIFE SCIENCES FUND
Silicon Valley venture firm Montreux Equity Partners has more than doubled its capital under management with the closure of its fourth fund on $250 million (€170 million). The fund exceeded its $200 million target and brings the firm's total capital under management to more than $430 million. Fund IV was marketed by placement agent Lazard Frères and limited partners include Hamilton Lane. The life sciences-focussed firm closed its third fund on $83 million in January 2004, which it said at the time would coinvest with Fund II for a total of $160 million in dry powder.
BLACKSTONE CLOSES $1.3BN DEBT FUND
The Blackstone Group has taken its debt investments in a new direction with the closure of Blackstone Credit Liquidity Partners on more than $1.3 billion (€884 million).
Though the buyout firm has a well established corporate debt group, which recently closed a €400 million collateralised debt obligation fund, and recently grew its credit funds with the purchase of GSO Capital Partners, the latest fund was specifically raised to capitalise on recent credit market volatility and is characterized as a “credit liquidity fund”. Raised with the help of Blackstone affiliate Park Hill Group, the fund will invest globally in debt and debt-related securities including bank debt, publicly traded debt securities, bridge financings, and securities issued by CDOs. Its capital is expected to be deployed over the course of one year, said a Blackstone spokesman.
ARCH VENTURE PARTNERS RAISES $400M
University of Chicago spinout ARCH Venture Partners has raised $400 million (€272 million) for its seventh venture fund. The fund is backed by investors from Europe, the US and Asia, including university endowments, corporations, pension funds, public institutions and private family foundations. Its investment strategy will be a continuation of predecessor funds, the most recent of which closed on $350 million in 2004. Fund VII will invest in seed and early-stage companies commercialising “revolutionary” technology developed by universities, national laboratories and entrepreneurs. That has been its strategy since spinning out in 1986 from a technology commercialisation initiative originated by the University of Chicago.
PAYPAL FOUNDERS RAISE $220M FUND
San Francisco venture firm The Founders Fund has raised $220 million (€153 million) for its first institutional fund, surpassing its initial target of $150 million. The firm was founded in 2005 by three PayPal co-founders, Peter Thiel, Like Nosek and Ken Howery. The firm has since added a fourth managing partner, Sean Parker, who founded file sharing programme Napster and online address book Plaxo. Founders' first fund closed on $50 million in July 2005. The capital came from the firm's managing partners and “select outside investors”. One of its first investments was seed capital for Facebook, then a social networking website for college students.
CALPERS TAKES 9.9 PERCENT STAKE IN SILVER LAKE
The California Public Employees' Retirement System has acquired a 9.9 percent stake in US buyout firm Silver Lake for an estimated $275 million (€187 million). “CalPERS' commitment to Silver Lake underscores Silver Lake's compelling track record as a leading technology-focussed investment firm and a top performer in their fund vintage years,” Leon Shahinian, senior investment officer of CalPERS Alternative Investment Management Group, said in a statement. CalPERS also owns stakes in Apollo Management, The Carlyle Group and TPG Ventures, now called TPG Growth.
GRYPHON RESPONDS TO CHANGING MARKET
San Francisco-based Gryphon Investors has raised a $100 million (€67 million) annex fund for opportunities arising from changing market conditions. Gryphon Partners III, its previous vehicle, closed on $415 million in 2006, and was about three-quarters invested by the end of 2007. Rather than begin fundraising for Gryphon Partners IV, the firm went back to its limited partners to raise additional capital through a rights offering, said president David Andrews. “It was a very quick and simple supplemental fund, which supplemented our capital base by 25 percent,” Andrews said. Fund III now has about $200 million in dry powder, which the firm expects to be fully committed by the end of the year. The newly raised capital will be invested pari passu with the remaining capital from Fund III. Gryphon sought to raise additional capital in response to both specific opportunities and general market conditions, Andrews said.