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North America: May 2001

US investment down, Thomas Weisel closes fund of funds down $200m, Levitt Joins Carlyle, Octane and Camelot return funds…

Whitney closes $900m down and stops investing overseas
One of the oldest private equity firms around, Whitney & Co, has closed its latest fund $900m short of its $2bn target and has decided to cease all investment outside the US. It announced that it was laying off 20 per cent of its staff, principally those posted abroad. It will leave one or two people in each of its offices in London, Tokyo, Hong Kong and Singapore to manage existing investments. Only last year, Whitney & Co changed its name from JH Whitney & Co to rebrand in anticipation of mass expansion.
PrivateEquityCentral 2.5.01

Infinity Capital delays raising fund
Silicon Valley-based Infinity Capital has postponed raising its latest $400m fund until the second half of this year. The firm began pre-marketing efforts for its second fund, but found that many institutional investors were cool to the idea of investing in a fund they hadn't committed to before. It had been seeking to attract at least four new limited partners to double the size of its debut fund. Instead of raising its new fund, Infinity intends to concentrate on its existing portfolio. It also has capital left to draw down from its first fund.
The Private Equity Analyst May 2001

Thomas Weisel closes fund of funds short of target
Thomas Weisel Partners is set to close its first fund of funds at $200m less than it had anticipated. It has also lost the partner who joined to manage the fund. The San Francisco investment bank had hoped to raise up to $500m for its Global Growth partners fund of funds, which would focus on computer-related investments; instead, it is to close in June with around $300m in commitments. Ashu Rajbhandari joined Thomas Weisel in March last year to manage the fund of funds, but he has now resigned.
EFinancial News 25.5.01

‘Labor funds' still dominate in Canada
‘Labor-sponsored funds' are still more prevalent in Canada than those backed by foreign or domestic institutional investors, according to the latest Canadian Venture Capital Association figures. Foreign institutions committed C$1.5bn - or a quarter of total investment - domestic institutions committed another quarter. The remaining half came from labour organisations, such as unions. Unique to Canada, these funds operate in a similar fashion to mutual funds and have social goals to meet, including job creation and economic development.
PrivateEquityCentral 4.5.01

Levitt joins Carlyle Group
The Carlyle Group has signed up Arthur Levitt, ex-chairman of the US Securities and Exchange Commission, as a senior adviser. SEC chairman for eight years, Levitt relinquished his duties in March. He was the SEC's longest running chairman. Other advisers to Carlyle include James Baker, one-time US secretary of state, and John Major, former UK prime minister.
EFinancial News 1.5.01

Octane Capital gives money back…
Late-stage private venture capital firm Octane Capital Management has decided to stop making investments and hand investors their money back. It has already invested around half of the $265m fund it raised last year. Octane has made no new investments since December and started thinking about winding down operations in March. The firm's managing partner, Emeric McDonald, will stay on at the firm  for two or three years to manage its existing investments.
Wall Street Journal 1.5.01

…and so does Camelot
Camelot Ventures, based in Michigan, was another firm forced to hand investors back their cash. It has also decided not to raise a new fund. Founded in 1999, the firm focuses on early to middle-stage companies in the internet, telecoms, software, hardware and services sectors.
PrivateEquityCentral 4.5.01

US investment down…
Investments by private equity funds fell by over 50 per cent in the first quarter of 2001 compared to the same period last year, according to the latest figures out by the National Venture Capital Association and Venture Economics. A total of $11.7bn was invested in the first three months of this year - the lowest figure for over two years.
Venturedome 2.5.01

…and down yet more
Another set of figures, this time by PricewaterhouseCoopers and Venture One, suggests that investment in the first quarter was even lower at $10.1bn. Funding in nearly every internet sector tumbled - in some cases by more than 50 per cent. However, private equity funds still managed to raise $20bn in this period. This is the highest ever raised in a quarter, apart from the last three months of 2000.
The Industry Standard 21.5.01

Calpers takes stake in Sports Capital Partners
Calpers has invested $122m in the holding company of Sports Capital Partners. It also committed capital to the firm's fund. This is the third investment in a private equity firm Calpers has made so far this year. Earlier in 2001, it bought into Texas Pacific Group Ventures for $485m and The Carlyle Group for $425m.
PrivateEquityOnline 1.5.01