Wednesday, August 09, 2006

Private Equity Week: Bay X

"Bay’s 10th fund, which closed with about $365 million in 2001, returned a negative IRR of 18.3%, as of Dec. 31, according to investment data from the California Public Employees’ Retirement System, an LP in the fund. But fund performance may not have been the issue with the departing GPs. One source close to the firm says that the three GPs have left in part because of an issue that plagues many Silicon Valley firms: succession. The source says that Noble, Vendetti and Knoblauch were unhappy with the “vastly different managing style� of Dempsey, who took the helm of Bay two years ago as firm founder John Freidenrich segued into retirement. "

1 comment:

oli said...

Investments in limited partnership interests (which is the dominant legal form of private equity investments) are referred to as Orange County equity investment which should earn a premium over traditional securities, such as stocks and bonds. Once invested, it is very difficult to gain access to your money as it is locked-up in long-term investments which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made.