RALEIGH, N.C. - The North Carolina Retirement System added $50 million to a Franklin Street Partners hedge fund of funds, the $50 billion system's sole hedge fund allocation, increasing the investment to $150 million.
SAN FRANCISCO - Venture capital investment in the first quarter slipped to less than $4 billion for the first time in five years, according to the Ernst & Young/VentureOne Venture Capital Survey. Just $3.4 billion was invested in 404 deals in the first quarter, compared with $5.7 billion invested in 555 deals a year earlier - declines of 40% and 27%, respectively. The drops reflect increased risk aversion by venture capitalists, according to the survey.
CHICAGO - Ibbotson Associates launched a hedge fund advisory service headed by industry veteran Ezra Zask. The service offers hedge fund due diligence and selection, portfolio construction and risk management for financial intermediaries, including money managers, insurance companies and others. Mr. Zask, a lecturer at Princeton University, has formed, managed and consulted to numerous hedge funds and funds of funds for 20 years, also working with funds formed by Standard & Poor's and Zurich Financial.
NEW YORK - Sixty-five venture-backed companies were acquired through mergers or acquisitions for a total of $1.34 billion in the first quarter, according to the National Venture Capital Association and Thomson Venture Economics. In the fourth quarter, 83 companies were acquired for $1.62 billion.
Despite the general decline, some industry sectors saw increases in total transaction values in the first quarter. In information technology services, there were five deals valued at a total of $287.3 million, compared with six deals valued at $6.2 million in the fourth quarter. The spike was mostly due to Nextel Communications' $276 million acquisition of NeoWorld.
Private equity return is negative for 8th consecutive quarter
NEW YORK - Annualized private equity returns were negative for the eighth consecutive quarter, according to the year-end 2002 Private Equity Performance index released by Thomson Venture Economics and the National Venture Capital Association.
All venture capital funds returned an average of -23.3% for the year ended Dec. 31, while private equity funds posted -11% for the same period. Early seed venture-cap funds posted the worst performance, -27.6%, for the one-year period ended Dec. 31. The Nasdaq composite, the public benchmark used by the NVCA, performed even worse, with a -31.6% return for the one-year period. Valuations of high-tech companies continued to fall and exit opportunities remained scare, negatively affecting short-term performance.
CHICAGO - Hedge Fund Research launched a new hedge fund-of-funds directory and database, as well as four indexes based on that database, said Josh Rosenberg, president. The directory, database and indexes are available to subscribers of the larger HFR hedge fund database, and separately for those interested only in funds of funds. The indexes are conservative, market defensive, diversified and strategic. The database includes some 470 hedge funds of funds, Mr. Rosenberg said. Definitions for each of the indexes, as well as more information about the database and directory, can be found at www.hedgefundresearch.com.
NEW YORK - BlackRock will acquire a majority stake in HPB Management, a fund of hedge funds formerly called HPB Associates. Terms were not disclosed. HPB Management will be merged into BlackRock's alternative investments program after the deal is finalized. Howard P. Berkowitz, HPB founder, will be managing director and CEO of BlackRock's hedge fund business. HPB manages $150 million in assets, mostly for high-net-worth investors. BlackRock's funds of hedge funds will be open to high-net-worth and institutional investors.
RYE, N.Y. - Tremont Advisers changed its name to Tremont Capital Management. The new name reflects Tremont's growing alternative investment management business, Robert Schulman, co-CEO, said in a news release. Tremont started in 1984 as a hedge fund consulting firm, but in recent years has focused on building and managing customized hedge funds of funds for institutional and high-net-worth clients. The firm manages more than $8 billion in assets in hedge funds of funds.