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North America: March 2003

CalPERS discloses private equity data, Onex Corp establishes $1.5bn co-investment fund, Railroad pension plan to invest in private equity, Ohio seeks manager…

US venture investment in life sciences falls again but increases share of total
US venture capital investments in life sciences fell for the second consecutive year in 2002 but have continued to increase their share of total venture investment, according to the MoneyTree survey from PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association. This apparent contradiction reflects the even more difficult conditions faced by other market sectors. Venture capital investments in biotechnology and medical device companies totalled $4.7bn last year, a significant fall from  $5.3bn in 2001 and $7bn in 2000. Life science's share of total investment in 2002 rose to 22 per cent, the highest proportion in seven years. Tracy Lefteroff of PricewaterhouseCoopers explained that investment in life sciences has been comparatively immune to the dramatic boom and bust fluctuations that have characterised other areas of the venture capital market, most notably technology sectors.
AltAssets 26.3.03

Ohio endowment searches for funds of funds
The $200m Ohio University endowment fund is currently searching for fund of funds managers to help it reach its target allocation to private equity. The search is being conducted by the endowment's consultant Hartland & Co, which is based in Cleveland.
Alternative Investment News March 2003

Ex-US Treasury Secretary to join The Blackstone Group as special adviser
The Blackstone Group has announced the appointment of Paul O'Neill, ex-US treasury secretary, as a special advisor. O'Neill's focus will be on the firms' portfolio companies, advising them on operational issues, and he will also help analyse potential investment opportunities. O'Neill was treasury secretary from 2000 to 2002. Before that he was chairman and chief executive of Alcoa for 12 years.
AltAssets 11.3.03

Landmark Partners seeks investor
Connecticut-based secondaries specialist Landmark Partners is reportedly seeking a buyer for a stake in the firm. The news emerges as Landmark Partners announces a first close at $400m on its latest secondaries fund. It is targeting is $750m. The firm is said to have hired Putnam Lovell Securities to help find an investor. New York-based American International Group is believed to be interested. The possible sale may be linked with the future retirement of chairman and co-founder Stan Alfield and the retirement last year of fellow co-founder John A Griner last year.
The Private Equity Analyst March 2003

CalPERS to disclose public equity performance data quarterly
The California Public Employees' Retirement System has announced its plan to ‘adopt a comprehensive performance disclosure policy for private equity investments that balances the need for transparency and protection of members' pension benefits'. Internal rates of return (IRR) will be published on a quarterly basis for funds and funds of funds, as well as total cash invested and profits realised from that cash. CalPERS will not be publishing the performance of portfolio companies, however, ‘because its release could harm CalPERS' ability to invest in the funds'.
AltAssets 18.3.03

US Railroad pension to commit to private equity
The $20bn National Railroad Retirement Investment Trust is to establish a $1bn private equity programme over the next few years. The trust is relatively new - it was created in 2001 - and decided to commit to private equity last year. It is looking to hire an extra person to help manage the programme and will not realistically make any investments before the second half of this year. The decision to invest in private equity followed an asset allocation study, which recommended a target allocation for the fund of five per cent.
The Private Equity Analyst March 2003

Indiana searching for VC fund to manage local investments
Indiana Public Employees Retirement System, which manages $9bn, is on the loo-out for a venture capital manager to source and invest in local start-ups. The new vehicle, known as the Future Fund, has earmarked up to $100m for investment in Indiana-based biotechnology, IT, advanced logistics and manufacturing companies. The fund will form part of the pension plan's overall alternative investment programme.
Alternative Investment News March 2003

Toronto-based Onex Corp to establish $1.5bn co-investment fund
Canadian financial group Onex Corporation has announced its plans to launch a $1.5bn private equity fund to which it has pledged an initial $300m, a sum that may be increased on an annual basis. Onex said that the fund would provide committed capital for new acquisitions not related to Onex existing operating companies. The fund, should it reach its $1.5bn target, will reportedly be more than ten times larger than its closest Canadian rivals. Canadian pension funds in particular have demonstrated an increasing interest in private equity funds, as the medium-term outlook for public equities markets remains miserable.
AltAssets 14.3.03

Long River Capital and Worcester Capital merge to create healthcare focused firm
Massachusetts-based Long River Capital Management has taken over Worcester Capital Management, a fellow member of the Village Ventures network of regional venture capital funds. The new firm will adopt the Long River name and focus on the healthcare and life science sector. The two firms now have combined investment capital of $30m to be put to work in central and western Massachusetts, with the remaining one third for other areas of New England.
VentureWire 6.3.03

Hartford pension scheme starts committing to private equity
The $850m Hartford Municipal Employees' Retirement System has made its first investments in private equity by committing $10m to Lexington Capital Partners V. it is also said to be considering investing in the latest Landmark Partners fund. The pension plan first decided to invest in private equity in 2000, but took its time over starting to make commitments because it wanted to be ‘well educated before jumping in', it said. Hartford's strategy of committing to secondaries funds in the first instance enables it to receive distributions relatively quickly and to gain an insight into individual general partners' track records, the plan confirmed.
The Private Equity Analyst March 2003

New York-based pension fund looks at private equity
The Manhattan & Bronx Surface Transit Operating Authority pension fund is said to considering in investing in private equity. The fund, worth around $520m, has seen a reduction in its assets of eight per cent and is in the early stages of looking at private equity and real estate in an attempt to diversify the fund with high-yielding investments.
Alternative Investment News March 2003

Mayo Clinic shelves venture arm
Minnesota-based Mayo Clinic Foundation has decided to pull the plug on their venture capital programme. The firm had had plans to raise a $100m fund, but in the face of investor apathy has decided to withdraw the proposal. It has also decided to bin its five-year investment programme, which was under the auspices of Mayo Medical Ventures. Mayo may still consider offering follow-on financing to its portfolio companies but has closed the door to any new commitments.
The Private Equity Analyst March 2003

Tredegar Investments disposes of venture interests
Tredegar Investments, venture capital division of manufacturing company Tredegar, has sold its interests in venture capital funds and direct investments. It has agreed the sale of its fund investments to the private equity group at Goldman Sachs Asset Management and of its direct investments to W Capital Partners. The company is said to be receiving around $75m in cash after tax for the disposals; as of December 2001, Tredegar Investments had invested $191m in its venture capital programme.
VentureWire 12.3.03