News digest, April 16, 2007

CalCEF to promote clean angels

The California Clean Energy Fund (CalCEF) tapped author Susan Preston to help invest its $30 million fund established three years ago as a result of the PG&E bankruptcy settlement.

Preston is the author of a book to be released soon called “Angel Investing for Entrepreneurs.” She’s expected to work with CalCEF to explore ways to promote angel investing in clean energy.

VC investments in cleantech rose 78% in 2006 to $2.9 billion, up from $1.6 billion during 2005. But in announcing Preston, CalCEF says that despite an influx of private investment capital aimed at cleantech, seed-stage or angel funding continues to lag, creating a gap in the commercialization of new potentially transformational cleantech technologies. Angels principally invest at this earliest stage, placing smaller amounts of funds with young companies, thus partially filling the funding gap between initial founder money and later stage venture capital investments.

Financial services attracts more LBO dollars

Private equity firms have seemingly infiltrated every nook and cranny of the investment universe. So it’s not surprising that buyout shops are now setting their sights on financial services, an industry they have historically shunned.

In fact, buyout firms invested in a record-breaking 96 financial services companies worldwide last year, with a value of $30.5 billion, according to Freeman & Co., an M&A advisory and consulting firm that focuses exclusively on the financial services industry. That’s up from 2004, when firms pumped just $14 billion in 67 deals.

The pace has continued in 2007. TA Associates announced last month that it was leading a near $1.45 billion management buyout of asset manager firm Jupiter. And Advent International recently acquired an 80% interest in Pronto, a leading consumer credit company in Uruguay.

That’s on top of several blockbuster deals last year, including the $7.8 billion purchase of GMAC, led by Cerberus, as well as Hellman & Friedman’s $950 million acquisition of Gartmore Investment Management, a U.K.-based asset manager.

To see the full story about buyout firms attracted to financial services, check out the latest issue of Buyouts.

IDG sees opportunity outside Vietnam

IDG Ventures Vietnam, which launched in 2004 with a $100 million fund, is looking at expanding throughout Southeast Asia, according to VentureWire.

The firm, which is funded entirely by parent company International Data Group Inc., is eyeing possible tech investments in Thailand and the Philippines and biotech deals in Singapore, Managing Director Henry Nguyen told VentureWire. IDG Vietnam currently operates out of Hanoi and Ho Chi Minh City.

Nguyen said the firm plans to raise the current fund by $70 million to $100 million, depending upon how much outside LP interest it can attract. Or it may decide to launch a new fund.

Finland court affirms sentence of VC

The Helsinki Court of Appeals has handed down a six-month suspended sentence against former Sonera Corp. CEO Kaj-Erik Relander for aggravated violation of communications privacy. The second main defendant in the case, former Sonera Information Security Manager Juha E. Miettinen was given a 10-month suspended sentence.

Relander, currently a general partner of Accel Partners in London, was convicted in 2005 of having violated Finnish privacy laws while he was with telecom giant Sonera (which is now part of TeliaSonera). The court found that Relander had ordered an illegal review of employee phone logs, which he used to determine who leaked information to the media about an internal company dispute.

Though he lost his appeal, the Helsinki Court threw out charges related to email log snooping. He told reporters that he would file one last appeal with the Finnish Supreme Court, but press reports suggest that such appeals are only successful in about 10% of cases.

He joined Accel in 2001. —PE Week staff