Raising a debut private equity fund is always a unique experience, and Elevation Partners' time on the fundraising trail was no exception. The firm is comprised of several partners who mostly have not invested together in the past. The strategy is cutting-edge and untried. These two attributes typically mean limited partners are initially very skeptical, and justifiably so.
Elevation Partners' strategy focuses primarily on building new businesses around intellectual property. The firm is the brainchild of Roger McNamee, who co-founded tech buyout pioneer Silver Lake Partners.
The Elevation Partnersfund – which closed in Auguston $1.9 billion (€1.6 billion) – had an additional, elephant-in-the-living-room-size feature that limited partners had to confront- one of the firm's general partners is Bono, the lead singer of U2.
How do sophisticated LPs respond when asked by a rock star to commit to a fund? With tough questions and exhaustive due diligence? With gushing fandom? As a source close to the fundraising recounts, a little of both, actually.
Menlo Park, California-based Elevation employed Bono in the fundraising effort as efficiently as possible. The rock-star-cum-GP held numerous back-to-back meetings with prospective LPs in New York and other locations (one LP says itwas the first time he recalled seeing a GP wear purple sunglasses in a marketing meeting).
Bono, nee Paul Hewson, is listed in the Elevation PPM as bringing ?media and entertainment domain knowledge and relationships? to the table. A source close to the fundraising said some LPs were worried that Bono's involvement in the fund would draw too much media attention. Others questioned how much time the singer would actually spend working for Elevation – in addition to touring and recording with U2, Bono spends enormous energies with world leaders on the subject of Third World debt forgiveness.
In meetings, Bono won the respect of investors in holding forth on the subject he knows best – the impact of technology on the entertainment industry.?Movie studios and record labels are not adapting to [new technologies] in constructive ways,?says the fundraising source.?Once he started to get into that with people, they got more comfortable with him.?
Some got more comfortable than others. Says the source:?One person came to the meeting and got down and dirty with Bono, asking him how much time he'd be spending [with the fund]. At the end, he whipped out an old Time magazine that was in an hermetically sealed slip case. Bono was on the cover. It was obvious this guy had been saving it for 20 years. He asked Bono to sign it.?
Willis publishes global guide to D&O risk
Insurance specialistWillis Group has published a worldwide directory of directors? and officers? liability, which details the potential personal liabilities for directors in 51 countries throughout the world. The 600-page directory was produced in conjunction with multiple law firms. Included are definitions of ?director?and ?officer? around the world, key geographies of concern, potential bringers of lawsuits, legal issues surrounding directors? and officers? insurance, tax implications and developments in corporate governance.
French insurers to rise as major LPs
Philippe Trainar, a director at the Association of French Insurance Companies, told a recent conference crowd that French insurance companies will invest more than €6 billion in private equity funds by 2007. The remarks came at the CEFI Summit Europe 2005 in Paris last month. Trainar said recent legal initiatives in France had increased incentives to invest in private equity. However, he said, much of the investment in private equity will come through funds of funds.
Blackstone takes over closed-end Asia fund
The Blackstone Group, through its newly formed Blackstone Asia Advisors, has assumed management of a closed-end fund, The Asia Tigers Fund. The fund is listed on the New York Stock Exchange under the ticker symbol GRR. Blackstone takes over from existing management company Advantage Advisers, which will see its contract expire on December 4. Puntina Kumar-Sinha will continue as the fund's portfolio manager. This year Blackstone opened an office in Mumbai, India. In a press release, Blackstone said its existing business lines in alternative investments will ?contribute to the success of the Fund.? Asia Tigers invests in Asian equity securities and seeks long-term appreciation.
Cipio expands in Europe, US
Cipio Partners, a private equity secondary direct investor, has bolstered its Munich and Silicon Valley operations with the appointment of two new associates and a promotion. Christoph Wedegaertner has joined Cipio Partners' Munich office as an associate. He comes from Munich-based family office BTV Group. In addition, Munich-based Gerhard Miller has been promoted to principal. David Mes has joined the firm's Silicon Valley office, which opened this pastsummer. Mes previously worked at pan-European early stage venture capital firm NESBIC CTE Fund. Cipiowas founded in 2003 and currently manages a portfolio of investments in almost 60 early stage and middle market companies.
London Stock Exchange promotes AIM in the US
In November, representatives of the London Stock Exchange promoted the Alternative Investment Market to a US audience at a seminar cohosted by law firms SJ Berwin and Fish & Richardson PC. At the seminar, held at the British Consulate General in New York, experts on the AIM listing process provided insight on how to approach listing on AIM and highlighted the ease of listing on AIM via a ?fast-track route? for non-UK companies already listed on certain markets. According to a spokeswoman for LSE, the fast-track option not only facilitates the AIM listing process for non-UK companies, but it also aids in attracting institutional investors and analyst coverage. The audience expressed particular interest in the lower costs associated with listing on AIM versus listing on an exchange in the US, as well as how the corporate governance requirements for non-UK companies listed on AIM compare with those requirements set forth by US regulation Sarbanes Oxley.