Last week, I asked the following: Can you name the venture capital firm that recently asked its limited partners to help arbitrate a spat amongst the general partners? Hint: Some of its partners need a passport to visit each other face-to-face. Same goes for its LPs.
The correct answer is Partech International, the Franco-American firm that also has an outpost in Israel. Three of you got it right, which puts you on the list for those T-shirts I keep promising to make (think they’ll be ready by peHUB Across America).
All of this has to do with Partech’s fifth fund, which recently closed on $300 million. Specific details of the dispute are unclear, except to say that it has more to do with personalities than investment strategy. When the general partners were unable to reconcile their differences, they asked for their LP advisory board to arbitrate. It has since done so, and issued a set of recommendations that would result in the departure – or “transition – of certain firm personnel.
Partech’s general partners adopted the recommendations in principle, and have since sent out amended fund documents to all of their fund V investors. The process is expected to be complete by month’s end, but in the meantime means that Partech cannot make any new investments. It can do follow-on deals from its past fund portfolios, but Fund V is static until the changes are baked in.
Vincent Worms, Partech’s co-founder and managing partner, acknowledged the situation in an interview earlier this week. “These are discussions related to the management of the fund, but it is not going to result in a major reorganization,” Worms explained. “Partech will remain trans-Atlantic… It’s not going to disappear.”
More details expected once LPs adopt the new structure. Should be interesting to see who remains, given that Partech has already lost three partners since the beginning of 2006 – plus a couple of associates and its in-house marketing manager. For the record, Worms says he’s among the expected survivors.