Private Equity Shrinks, Venture Capital Grows

Lord Wolfson and Sir Charles Dunstone are to back the fund, Pembroke, which is being led by private equity and investment veteran Peter Dubens. The fund will be managed by Mr Dubens’ Oakley Group, whose Oakley Capital has already backed a number of small successful businesses including chef Tom Aikens’ restaurants, reports The Telegraph.

A common theme in the private equity world as asset prices have risen is the apparent lack of opportunities to find good value in new investments. Now, Goldman Sachs analysts are warning clients invested in big, publicly-traded alternative asset managers about a "private equity cliff," and they say the big fees that fund managers collect from investors are at risk. The chart below shows the "cliff" Goldman is talking about.

With the world’s largest miners flocking to sell assets, cost cuts across the industry and a virtual drought in buyers, private equity funds may finally be tempted into a sector long seen as potentially lucrative but risky. Industry veterans say the coming months will be a test of whether private equity funds can turn intentions into investments and become more than niche players in an industry that has traditionally relied on public markets for cash.

It could be months before the SEC formally regulates crowd funding, one of the JOBS Act’s most exciting provisions, but some enterprising startups aren’t waiting for a green light from Washington to tap the crowd for capital.   While JOBS has won widespread support with its streamlined IPO provisions, some of the law’s key benefits, including the ability to crowd fund as much as $1 million in seed capital, still have to go through the Securities and Exchange Commission’s (SEC) lengthy rule-making process.  

ChinaBio Today submits: Sagent Pharmaceuticals of Schaumberg, Illinois raised $40 million in two tranches of a series B financing from China sources (see story).

It’s a time-honoured process: recognize that there is a problem and then do something about it. That’s what the gang at the TSX Venture Exchange is doing through their decision to hold two industry dialogues, the first in Vancouver and the second in Calgary later this month.

The global economy’s insatiable demand for energy in all its forms has made the energy sector a magnet for high-wattage private equity (PE) interest. As we explain in Bain & Company’s Global Private Equity Report 2013, strong recent fund-raising activity by PE funds targeting the industry suggests that investments in the energy space will be plentiful over the coming years.

From the Bloomberg editorial "Energy Revolution Keeps Carbon on Top," by Nathan Myhrvold, former chief strategist and technology officer at Microsoft and the founder/CEO of Intellectual Ventures: