ALBANY, N.Y. - The investment officer in charge of alternative investments for the New York State & Local Retirement Systems said a minority venture capital partnership whose principals had multiple years of experience in the discipline lacked the relevant experience to warrant a commitment from the fund.
But two other companies with similar investment strategies but less venture capital experience among their principals received commitments from the comptroller.
New York State Comptroller H. Carl McCall did not say why he and his staff passed on the firm with an apparently greater amount of experience.
In a follow-up interview, Mr. McCall declined to explain the selection of minority venture capital companies Bastion Corp., Los Angeles, and Fairview Capital L.P., Farmington, Conn.
Pensions & Investments learned Thomas Laders, senior investment officer with the fund, told the principals of Chicago-based Ark Capital Management in January 1994 that "the lack of relevant experience of the principals involved cannot be overcome."
Mr. McCall reiterated that sentiment in the follow-up interview.
According to biographies in Ark's marketing materials, Michael Granger was an investment manager of Xerox Venture Capital and a principal at CIGNA Venture Capital. Xcylur Stoakley was a manager of private equity for the Ameritech Investment Management Group for Chicago-based Ameritech Corp.'s pension fund.
By comparison, one of the two principals at Bastion appears to have no apparent venture capital experience. One of the principals of Fairview Capital L.P. also has no venture capital investing experience.
According to Bastion's marketing materials, Daniel Villanueva, chairman of Bastion, is a 25-year broadcast executive who has developed and sold numerous broadcasting properties. Bastion President Guillermo Bron was formerly a managing director of corporate finance and mergers and acquisitions at Drexel Burnham Lambert. Mr. Bron has participated in numerous financings.
The Fairview L.P. is a joint venture between JoAnn H. Price and Bigler Investment Management Co., Farmington, Conn.
Ms. Price is the former president of the National Association of Investment Companies, a trade association for minority-focused venture capital firms. An analysis of Fairview by consultant Wilshire Associates Inc., Santa Monica, Calif., said Ms. Price "does not have experience investing in venture capital nor managing investment funds."
But Wilshire also said Ms. Price's experience at the NAIC "has given her a comprehensive understanding of minority company private equity partnership investing."