Dan Primack

CalPERS today released more than 5,000 pages worth of documents related to placement agents used to secure investments from the pension system. These are based on a recent CalPERS board request that each of its general partners provide information on who, if anyone, helped place the funds and how much was paid in fees. The submissions were voluntary, with approximately 90% of CalPERS investees replying. We're awaiting a list of the 10% that declined (a CalPERS spokeswoman said that she'd rustle one up). We have posted almost all of the disclosure forms from VC and private equity firms, although not the ones from real estate funds and certain special purpose vehicles (there's simply too much stuff). If there's a headline, it's probably that ARVCO -- the placement agency run by former CalPERS board member Alfred Villalobos -- received far more in fees (we're talking multiples) than did any other placement agent. Also the continuing story about how CalPERS has been a huge proponent of investment transparency and quality corporate governance over the years, but apparently neglected to do some fundamental recordkeeping for its own activities. Find tons of documents after the jump. Part II can be found here.

I am pleased to announce that the next peHUB Shindig will be in New York City on February 3. We'll be doing it again at Connolly's on West 45th Street, and tickets are on sale now. Get yours by going here. Per usual, no content – just cocktails & conversation with other members of New York's venture capital and private equity communities. Investors, entrepreneurs, bankers, lawyers and other assorted hangers-on. Tickets cost just $10 each, with proceeds being donated to a local charity that will be selected by event attendees (you can nominate a charity when you register). I urge you to get yours soon, since the last peHUB Shindig in New York sold out. A very special thanks to our sponsors: First Round Capital, NYPPEX Private Markets, PCG Asset Management and RCP Advisors.

A common VC refrain in the carried interest tax debate has been that very few VCs have actually seen carried interest in the past decade. I don’t exactly follow this line of argument (although I certainly don’t deny the premise). Is it supposed to mean that a tax increase (or decrease) won’t have much tangible […]

Fidelity this afternoon announced that the U.S. team of Fidelity Ventures was spinning out into an independent, Boston-based firm called Volition Capital. The new group will continue to manage 20 Fidelity Ventures portfolio companies in the U.S., and jointly manage six European portfolio companies with what is now being called Fidelity Growth Partners Europe. Volition's four managing partners are: Larry Cheng, Andy Flaster, Roger Hurwitz and Rob Ketterson. Other staffers include Geraldine Alias, Sean Cantwell, Don Haile, Anne Mitchell and Jill Roosevelt. I spoke briefly with Larry Cheng, who tells me that the move was made for two reasons: (1) The Fidelity Ventures team was itching to run their own show; and (2) An independent firm would make it easier to raise third-party capital (Fidelity Ventures as solely funded by its parent).

Benchmark Capital will not raise a third fund focused on Israel, according to an Israeli press report. Silicon Valley-based Benchmark launched its Israeli affiliate in 2001 with a $260 million fund, and raised a $250 million follow-up in 2005. In a June 2008 interview with Private Equity Week, Benchmark partner Steve Spurlock said that Benchmark Israel would return to the fundraising market in 2009. This was despite the Israeli affiliate's then-recent loss of two founding partners: Mark Kremer and Nachman Shelef. It's unclear if Fund III launched and stalled, or never began at all.

Readers regularly email to pick apart my support for changing the tax treatment of carried interest from capital gains to ordinary income. Almost all of the correspondance now relates to venture capital, as buyout and hedge fund managers seem to have accepted that their loophole is closing. Here's a recent email from reader Bill: “One can argue whether or not preferential capital gains tax treatment, in general, is a good idea, but to split hairs and say that one set of managers (entrepreneurs) deserve it, but another set of managers (VC, PE guys) do not, evidences not just a fundamental lack of appreciation for what financial managers do within the context of a modern economy but also a willingness to sustain a clearly illogical and contradictory position in order to maintain some romantic, populist and dated notions about the relative social value of different kinds of labor. Therefore I challenge you: If you truly believe that investment GPs should have their carried interest taxed, then take the next logical step and declare your opposition to the favorable tax treatment for corporate managers' equity stakes.” Bill articulates the single stickiest wicket in my argument for changing carried interest tax treatment. And it’s one I’ve wrestled with a bit this morning. Here's what I've come up with so far:

There has been lots made of the past year's anemic VC-backed IPO market, but let's leave the past behind and look at what could be coming up over the liquidity horizon. Our records indicate that there are 28 VC-backed companies currently in registration to price IPOs on U.S. exchanges, representing more than $3.75 billion in targeted raise. More than half of the registrations occured last quarter, but there's one from 2008 and even a pair from 2007. Also worth noting that for all the talk of 2010 being the year of the social network-related IPO (Facebook? LinkedIn? Zynga?), no such company is currently in registration. Closest we get are a pair of online marketing/advertising companies. Get the full lot of them after the jump...

Deb wrote in the fall about VC-backed geothermal project companies, including concerns that their drilling efforts could cause earthquakes or other losses of terra firma (see here and here). She specifically focused on AltaRock, which had been drilling in Northern California geysers. AltaRock suspended and then abandoned drilling in the geysers due to "physical difficulties," but the Department of Energy nonetheless opted to complete its review (in part because it gave AltaRock and others grant money for alternate drilling projects). The result were several new requirements for any company engaged in geothermal drilling, with or without government funding. These include stress test and simulation requirements and an expert review of those tests by a DoE panel. (Download the letter here)

My weekly video spot for Reuters Small Business, this time discussing the carried interest tax issue (vis-a-vis venture capitalists, since PE pros seem to have given up this particular ghost). Not really anything I haven't written before, but this time you can see me say the words. Not sure if that makes them carry more weight, or less....

Roger Chabra has left Canadian venture capital firm GrowthWorks after a three year run, in order to become a partner with Rho Canada. In an email sent yesterday to friends and colleagues, Chabra wrote: "I am excited to be joining such an experienced and successful group of venture investors at Rho. Rho Canada is a leading venture capital firm and is dedicated to backing high-potential, early-stage companies. Formed in 2006, Rho Canada is closely affiliated with Rho Ventures in the US and leverages off Rho Ventures' 25+ years of experience in investing in venture-stage companies. Rho Canada and Rho Ventures are actively investing out of their respective funds today and we continue to seek new deals that fit our investment mandate." Chabra added that he expects to shuttle between Rho Canada's Montreal headquarters and its Toronto outpost. The firm also has a New York office, and raised just over US$100 million for a fund in 2006. I hear that the fund still has plenty of dry powder, but that Rho Canada is pre-marketing a new vehicle with hopes of holding a final close late this year. No official word yet on a target, but it will likely be close to the $100 million mark.