PE Week Wire — Friday, August 26

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Mr. Weld Goes to Albany?

William Weld, former Massachusetts governor and current private equity pro with Leeds Weld & Co. is planning to run for Governor of New York. He’s officially still in the “exploration” mode, but that’s kind of like saying that I’m “exploring” the possibility of driving home this afternoon. Barring something unexpected, it’s going to happen.

No former word yet from Weld, but GOP bigs in New York have acknowledged the candidacy on-the-record, and Jeffrey Leeds told me yesterday that Weld will transition into a part-time senior advisory role with Leeds Weld & Co. after Labor Day. We’ve had lots of politicians move into private equity and lots of private equity pros move into politics, but Weld could be the first politician to successfully move fulltime into private equity, and then back into elected office (although not the first to try, thanks to Erskine Bowles). So let’s discuss:

Background: Weld is a Long Island native who has spent most of his adult life in Massachusetts. He was educated at Harvard, served as a U.S. Attorney under President Reagan, was Governor from 1990-1997 and lost a U.S. Senate race to John Kerry. He also was nominated by President Clinton to be Ambassador to Mexico, but got blocked by Sen. Jesse Helms, who felt Weld was too pro-choice and pro-gay rights (which, as we all know, are important parts of our foreign policy relationship with Mexico).

He then moved to New York to work for law firm McDermott, Will & Emery, and also took an advisory role with Leeds Equity Partners, a private equity firm focused on the education market. On January 1, 2001, he transitioned into a fulltime role with the firm, which subsequently was renamed Leeds Weld & Co.

Intentions: I interviewed Weld when he decided to become a private equity guy, and asked him two basic questions. The first was whether he planned to be a real investor, or just a nameplate/corner office person used to reel in a few big fish. He insisted it would be the former, and his record has born that out. The second was whether private equity was just a pit stop on his way to Albany, since such rumors had been swirling since the day he moved south. He didn’t answer directly, instead saying that there was a six-year residency requirement for gubernatorial candidates and that he hadn’t yet been in the state for two years. In other words, “Get back to me when a 2006 election is coming up.” Hello Bill…

Given all this, one would assume that limited partners knew they might be losing Weld when committing to a $450 million fund in 2003 and 2004 (it was targeted at $500 million). Indeed, one LP I spoke with yesterday said he would have been more surprised if Weld was staying. It is worth noting, however, that the firm sent LPs a letter in April that read as follows (according to the AP):

You may have seen reports in the press suggesting that Bill Weld is considering running for governor of New York. Without going into a disquisition on the press, suffice it to say that Bill is full-time engaged in the business of Leeds Weld & Co.

While it has always been Bill’s practice `never to say never,’ Bill is not running for governor of New York or for any other office. Not that anyone is asking, but neither is Jeffrey. Be assured that should either Bill’s (or Jeffrey’s) plans change, you will hear it from us.

I asked Leeds (a Democrat, incidentally) about the letter, and he basically said that it was true at the time. He added that LPs were informed immediately once Weld said he was seriously exploring a run.

PE Baggage: Most PE pros who run for office eventually have to deal with some portfolio company skeletons. Erskine Bowles, for example, had the whole Connecticut vs. Forstmann Little mess, while Mitt Romney was hounded by an old Bain Capital deal during his 1994 run for U.S. Senate. Already, a former teacher at a Leeds Weld portfolio company/school has told a tale of corporate deceit to the NY Sun, and he’ll have to explain why school privatization is good for communities and bad for investment companies (Leeds Weld backed Edison Schools, until the SEIU and others put a crimp in its fund-raising activities). Par for the course…

Prospects: The only poll I’ve seen so far comes from Rasmussen Reports, which puts Weld way behind likely Democratic Party nominee Elliot Spitzer, and also behind GOP primary foe Tom Golisano (founder of Paychex Inc.). It’s important to note, however, that both Spitzer and Golisano have formally announced their candidacies, while Weld’s red, white and blue balloons are still in limbo. What’s particularly interesting about the poll, however, is that 68% of voters have either a positive (35%) or negative (33%) opinion of Weld, which is high considering that he should be a relative unknown in New York.

Repercussions: Finally, the most interesting part of this to me is that a private equity guy could be running against Wall St. scourge Spitzer. I’ve heard PE worries for well over a year that Spitzer soon will somehow turn his litigious sights to private equity, but my guess is that Weld’s candidacy will blunt such a move. It simply will look too transparent. On the other hand, if he finds something damning at one firm, he could paint Weld with a broad brush.

Just out of curiosity: Do you expect NY State Attorney General Elliot Spitzer to set his sights on private equity? (this is a one-question poll).

*** Attention Journalists: Buyouts Magazine is looking to add a Senior Editor. If you or someone you know if interested, please email all the relevant materials (resume, a few clips, etc.) to Danielle.Fugazy@thomson.com, with the email subject heading “Senior Editor Position.” We’d prefer someone in New York or Boston, but all interested candidates are encouraged to apply.

*** Friday Feedback will morph into Monday Mouth-Off, so you’ll have to wait three days for your SPAC fix. Talk to you then…

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    Top Three

 

Adiana Inc., a Redwood City, Calif.-based developer of a permanent contraceptive device for women, has raised $23 million in Series D funding. Tullis-Dickerson & Co. led the deal, and was joined by OrbiMed Advisors and return backers Alloy Ventures, Boston Scientific Corp., Delphi Ventures, Abingworth Management, Forward Ventures, Oakwood Medical Partners and the Kaiser and Permanente Foundations. The company has raised nearly $55 million in total VC funding since its 1997 inception. www.adiana.com

 

Fremont Partners has sold Juno Lighting Inc. to Square D, a unit of France-based Schneider Electric SA, for $610 million. Juno Lighting is a Des Plaines, Ill.-based maker of lighting fixtures and systems acquired by Fremont via a June 1999 leveraged recapitalization. www.junolighting.com www.fremontpartners.com

Allianz Private Equity Partners has held a 400 million euros first close for its first institutional fund-of-funds. It is looking to raise a total of 750 million euros. www.apep.com

    VC Deals

Rave Wireless Inc., a New York-based company focused on letting mobile phone users share time and location-based information, has raised $5 million in Series A funding from Bain Capital Ventures and Sigma Partners. www.ravewireless.com

Pervasis Therapeutics Inc., a Cambridge, Mass.-based biotech company focused on cardiovascular disease, has raised approximately $12.4 million in Series B funding, according to a regulatory filing. Highland Capital Partners was joined on the deal by return backers Polaris Venture Partners and Flagship Ventures. www.pervasistx.com

MediHome Ltd., a UK-based provider of acute nursing care services to patients in their own homes, has raised Gbp250,000 in funding from the Thames Valley Inv*stment Network, a business angel group operating in Reading and surrounding areas. www.medihome.co.uk

KFx Medical Corp., a Carlsbad, Calif.-based developer of minimally invasive rotator cuff repair systems, has raised $6.2 million in Series A funding. Charter Life Sciences led the deal, and was joined by Arboretum Ventures, Montreux Equity Partners and MB Venture Partners.

Vendavo Corp., a Palo Alto, Calif.-based provider of price management software, has raised around $15.58 million in Series E funding, according to a regulatory filing. Mesirow Financial Capital Partners was joined by returns backers like DCM-Doll Capital Management, Sigma Partners and Interwest Partners.

Card Player Media, a Las Vegas-based media company focused on poker enthusiasts, has raised an undisclosed amount of venture capital funding from a small group of professional card players and card-playing actors. The group includes Phil Hellmuth, Daniel Negreanu, Todd Brunson, Jennifer Harman, Thomas Keller, Laura Prepon, Danny Masterson and Chris Masterson. www.cardplayer.com

Lincoln Paper and Tissue LLC, a Lincoln, Maine-based niche paper and tissue manufacturer, has raised approximately $35 million in subordinated notes and equity from PCG Capital Partners, the direct inv*stment arm of Pacific Corporate Group. The company also received $1 million in equity funding from management, and an undisclosed amount of senior financing from LaSalle Business Credit. www.lpandt.com

    Buyout Deals

Parallel Inv*stment Partners has sponsored a management buyout of collegiate sports marketing company Action Sports Media Inc. No financial terms were disclosed for the deal. Action Sports Media also announced that it will move its headquarters from Portland, Ore. To Knoxville, Tenn., and that former Host Communications execs Gordon Whitener and Jerry Felix will joined the company as CEO and CFO, respectively. www.parallelip.com www.actionsportsmedia.com

Six Flags Inc. (NYSE: PKS) put itself on the auction block yesterday, in an attempt to block dissident shareholder Daniel Snyder from taking control of the company. The amusement park company is believed to be worth approximately $3 billion, but also comes with more than $2 billion in debt. Last year, Six Flags sold its European assets for approximately $200 million to Palomon Capital Partners. www.sixflags.com

Texas Pacific Group and *stindustrial SpA both are denying Italian press reports that TPG has formally agreed to sell its 35% stake in motorcycle company Ducati Motor Holding SpA to Inv*stindustrial.

    PE-Backed IPOs

Under Armour Inc., a Baltimore, Md.-based provider of performance apparel and accessories, has filed to raise $100 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol UARM, with Goldman Sachs serving as lead underwriter. Under Armour lists Rosewood Capital as a minority shareholder. www.underarmour.com

Foundation Coal Holdings Inc. (NYSE: FCL) filed for a $336.6 million secondary offering, but did not say if either First Reserve Corp. or The Blackstone Group will be among the selling shareholders. Each private equity firm currently holds a19.1% ownership position in the company. www.foundationcoal.com

    PE-Backed M&A

Infor Global Solutions, an Alpharetta, Ga.–based provider of software for the manufacturing and distributions markets, has acquired Formation Systems Inc., a Southborough, Mass.-based provider of product lifecycle management solutions to process manufacturing companies. No financial terms were disclosed. Infor is owned by Golden Gate Capital, while Formation Systems raised around $36 million in VC funding from ABS Ventures, Bessemer Venture Partners, Bain Capital Ventures and Lightspeed Venture Partners. www.infor.com www.formationsystems.com

AutoFarm, the agricultural division of Menlo Park, Calif.-based GPS company Novariant Inc., has acquired Cultiva Inc. of Swanton, Conn. company focused on building precision farming equipment. No financial terms were disclosed. Novariant has raised over $33 million in VC funding from firms like Clearstone Venture Partners, SpaceVest, Marubeni Corp., Kirlan Venture Capital, Arcturus Capital, Pacifica Fund and Yasuda Enterprise Development. www.novariant.com www.cultiva.com

    Firm & Fund News

Metalmark Capital Partners, formed last year by the spinout of Morgan Stanley Capital Partners, is looking to raise upwards of $1.75 billion for its first independent fund, according to a regulatory filing. The firm already has nearly $360 million in committed capital from such groups as New York State Teachers’ Retirement System, the GM Hourly-Rate Employees Pension Plan, Mellon Bank and the Georgia-Pacific Corp. Master Trust. www.metalmark.com

Meritech Capital Partners has raised nearly $330 million for its third fund, according to a regulatory filing. Limited partners include the Michigan State Treasury, JPMorgan, the Minnesota Mining and Manufacturing Co. Employee Retirement Income Pension Trust and Commonfund Capital. www.meritechcapital.com

Auda Capital is looking to raise up to $300 million for its fourth fund-of-funds, according to a regulatory filing. It already has approximately $100 million in commitments. www.auda.net

    Human Resources

CDC Corp. (Nasdaq: CHINA) has added two board members: Simon Wong, director and executive vice president of Transpac Capital; and K.O. Chia, a former managing director of venture capital firm Walden International. www.cdccorporation.net

Etienne de Villiers, founder of Englefield Capital and the former president of Walt Disney Television, has been named non-executive chairman of the BBC’s commercial holdings board. www.bbc.com

Nautilus Inc. (NYSE: NLS) has added two board members: Ronald Badie, former vice chairman of Deutsche Bank Alex. Brown; and Marvin Siegert, president and chief operating officer of private equity firm The Pyle Group LLC. www.nautilusinc.com

THURSDAY, AUGUST 25

Just Linking Around

*** Tomorrow’s feedback column will focus mostly on SPACs, and the readers that love them (which seems to be no small number). In the meantime, here’s another cynical piece from TheStreet.com.

*** John Cook, the VC/tech columnist for the Seattle Post-Intelligencer, recently launched a blog. I’m pleased to present it to you on the very day he begins vacation.

*** Brad Feld provides all the relevant links to the row over whether or not LightReading’s founders used VC due diligence and then ditched the actual VCs.

*** Rob Day asks What’s Happened to Cleantech Dealflow? (scroll down).

*** Matt Marshall throws a lot of ideas together (scroll down to “Big hairy audacious thoughts on transformation in VC-land”), but I think the abstract is that certain VCs are forming their own firms in part because there is so much available LP capital (i.e., the LP overhang which has been discussed in this space ad nauseum). Imagine their surprise to learn that most LPs still want the brand names, even if those brands have long lost their top-quartile status.

*** Yesterday’s pull-quote from Kevin Fong of Mayfield should not have included exclamation points. First, they are bad for sp*m avoidance. Second, he didn’t ever raise his voice or utter an exclamation. Just a formatting error…

*** Finally: I’ll be on a VC media panel hosted by the NVCA on Sept. 15 in Boston, along with reporters from Dow Jones and The Boston Globe. It’s for NVCA members only, so contact the NVCA if qualified and interested.

    Top Three

 

Wind Point Partners has closed its sixth middle-market buyout fund with $700 million in capital commitments. Limited partners include the State of Michigan Retirement System, Ontario Teachers’ Pension Plan, DaimlerChrysler Retirement System, Northwestern Mutual Life, Alaska Permanent Fund, Alaska State Pension Inv*stment Board, the Public School Retirement System of Missouri and Standard Life Inv*stments. In conjunction with the fund closing, Wind Point has promoted principals Nathan Brown and Michael Solot to managing director. It also promoted five vice presidents — Mark Burgett, Jeremy Busch, Michael Nelson, Paul Peterson and Alex Washington — to principal. www.wppartners.com

Intellon Corp., an Ocala, Fla.-based provider of integrated circuits for high-speed powerline networking, has raised $24.5 million in Series B funding. BCE Capital led the deal, and was joined by Goldman Sachs, Intel Capital, Motorola Ventures and return backers Comcast Interactive Capital, Duchossois TECnology Partners, EnerTech Capital, Fidelity Ventures, Hydro-Quebec CapiTech, Liberty Associated Partners, LP, Philips Venture Capital Fund, TL Ventures and UMC Capital Corp. The company has raised over $150 million in total VC funding, including a $29 million Series AA recap in 2003. www.intellon.com

Vonage Holdings Corp., an Edison, N.J.-based broadband phone company, is planning an IPO that could raise upwards of $600 million, according to multiple press reports. The company has raised over $400 million in total VC funding since its 2001 inception, including a $200 million Series E infusion back in May. Backers include Bain Capital Ventures, New Enterprise Associates, 3i Group, Meritech Capital and Institutional Venture Partners. www.vonage.com

    VC Deals

BroadBus Technologies Inc., a Boxborough, Mass.-based provider of video-on-demand server systems and software, has raised $20 million in Series C funding, according to a regulatory filing. Return backers included Battery Ventures, Charles River Ventures and Star Ventures. The company has raised approximately $55 million it total VC funding since its 1999 inception. www.broadbus.com

White Rock Networks Inc., a Richardson, Texas-based optical telecom equipment company, is raising a $22.67 million Series AA recap round, according to a regulatory filing. Listed shareholders include Fremont Ventures, Meritech Capital Partners, Inv*stor Growth Capital, Oak Inv*stment Partners and 3i Group. Onetime White Rock backer Mayfield is not listed, although former Mayfield partner Todd Brooks is still a director. The filing indicates that White Rock has called down approximately $15.54 million of the deal, which brings its total VC raised to over $160 million. www.whiterocknetworks.com

Protez Pharmaceuticals, a Malvern, Pa.-based developer of antibiotics that combat drug-resistant and life-threatening infections, has raised $15 million in Series B funding. BioAdvance Ventures and Birchmere Ventures co-led the deal, and were joined by L Capital Partners and S.R. One. www.protez.com

New Chapter Inc., a Brattleboro, Vt.-based provider of organic pro-biotic nutrients and herbal formulations, has received an undisclosed amount of growth equity funding from Bear Growth Capital Partners, an affiliate of Bear Stearns Merchant Banking. It is unclear if this deal is related to an $8.65 million Series A infusion that New Chapter reported with the SEC last month. www.new-chapter.com

Viamet Pharmaceuticals Inc., a Carrboro, N.C.-based drug company, is raising $200,000 in Series 1 funding, according to a regulatory filing. Intersouth Partners is listed as a shareholder, while Holden Thorp, chairman of the chemistry department at UNC Chapel Hill, is listed as an executive.

Intechra Holding Corp., a Carrollton, Texas-based recycler and re-marketer of computers and other technology assets, has raised $4 million in Series B funding. Chrysalis Ventures led the deal, and was joined by return backers Votum Capital and Clayton Associates. www.intechra.com

    Buyout Deals

 

The Carlyle Group has agreed to sell Panolam Industries International Inc. to Genstar Capital, The Sterling Group and company management. No financial terms were disclosed for the deal, which is expected to close in the next several months. Panolam is a Shelton, Conn.-based maker of laminate panels for commercial and residential uses, and was bought by Carlyle in November 1999. www.carlyle.com www.panolam.com

Industri Kapital has agreed to buy French pre-cast concrete products company Bonna Sabla from AXA Private Equity and BS Private Equity SpA for an undisclosed amount. www.bonnasabla.com

BayStar Capital is backing Quincy Jones‘ $100 million effort to repurchase Vibe magazine from Freeman Spogli & Co., according to The Deal. www.vibe.com

Graham Partners has agreed to buy Line-X Inc., a Santa Ana, Calif.-based franchisor of branded, spray-on pick-up truck bedliners. No total purchase price was disclosed, although Allied Capital is providing $52.1 million in senior secured notes and a $5 million revolver. www.golinex.com www.grahampartners.net

The Peacock Group, a publicly-traded UK fragrance retailer, reportedly is in management buyout talks with an unnamed private equity firm. The deal is expected to value the company at approximately Gbp400 million.

Register.com Inc. (Nasdaq: RCOM) reportedly is facing a shareholder class-action lawsuit, following its decision to accept a $200 million buyout offer from Vector Capital. The deal works out to approximately $7.81 per share, but the plaintiffs are alleging that Register.com breached illegally postponed its 2005 annual meeting, and that the buyout agreement violates Register.com’s fiduciary duties to its shareholders. www.register.com

    PE-Backed IPOs

Directed Electronics Inc., a Vista, Calif.-based maker of branded vehicle security, convenience and audio products, has filed to raise $225 million via an IPO of common stock. It plans to trade on the NYSE under ticker symbol DEI, with Goldman Sachs and JPMorgan serving as lead underwriters. The company was acquired in December 1999 by a private equity consortium that included Trivest Partners (lead), BancBoston and Mass Mutual. It also completed a $185 million recap in June 2004. www.directed.com

Passave Inc., a Santa Clara, Calif.-based fabless semiconductor company focused on system-on-a-chip solutions for fiber-to-home applications, has filed to raise $90 million via an IPO of common stock. It plans to trade on the Nasdsaq under ticker symbol PSVE, with Merrill Lynch and JPMorgan serving as lead underwriters. Shareholders include Walden Israel Ventures, Blue Orange Ventures, Eurofund 2000, BRM Capital and Intel Atlantic Inc. www.passave.com

    PE-Backed M&A

PassMark Security Inc., a Redwood City, Calif.-based developer of Internet authentication systems, has acquired Vocent Solutions Inc., a Mountain View, Calif.-based provider of authentication solutions for the telephone market. No financial terms were disclosed. PassMark has raised over $8 million in VC funding from firms like Menlo Ventures and Diamondhead Ventures, while Vocent has over $15 million from Menlo Ventures and SVB Capital. www.passmarksecurity.com www.vocent.com

Woodstream Corp., a Lititz, Pa.-based maker of pest control products, has acquired Colibri Holding Corp., a Denver-based maker and marketer of hummingbird and seed feeders, plus lawn and garden accessories. No financial terms were disclosed. Woodstream is owned by Brockway Moran & Partners. www.woodstreamcorp.com www.perky-pet.com

Ikano Communications Inc., a Salt Lake City-based provider of private-label Internet services, has acquired Dialup USA Inc., a Washington, D.C.-based Internet company that provides wholesale dial-up, technical support and email services to over 1,500 domestic ISPs. No financial terms were disclosed. Ikano has raised approximately $50 million in VC funding, most of which has come from Insight Venture Partners. www.ikano.com www.dialupusa.net

    PIPE Deals

ACT Teleconferencing Inc. (Nasdaq: ACTTW) has completed the first close of what is expected to be a $16 million PIPE deal with Dolphin Direct Equity Partners. www.acttel.com

WL Ross & Co. has acquired a 3.74% stake (5,555,283 shares) in UK Coal Company PLC. www.wlross.com

    Firm & Fund News

WestBridge Capital Partners has closed its second VC fund with $200 million in capital commitments, according to a regulatory filing. Limited partners include Princeton University, the University of Chicago, the William and Flora Hewlett Foundation and Morgan Stanley. The Foster City, Calif.-based firm focuses on outsourced service and IT companies in India. www.wbcp.com

Strength Capital Partners of Birmingham, Mich. is looking to raise up to $100 million for its second fund, according to a regulatory filing. The fund already has nearly $35 million in commitments, and will back mid-market companies based in the Midwest. www.strengthcapital.com

BISYS Alternative Inv*stment Services has opened a new serving facility in Waterford, Ireland, which will complement the firm’s existing operations in Dublin. www.bisys.com

    Human Resources

Bernard Harris, president and CEO of Vesalius Ventures, has joined the board of U.S. Physical Therapy Inc. (Nasdaq: USPH). www.usph.com

SpaceVest Capital, a Reston, Va.-based venture capital firm, has hired Srinivas Mirmira as an associate and Ish Dugal as an analyst. www.spacevest.com

WEDNESDAY, AUGUST 24

Mayfield Closes Fund, Is “Saddened” By LP Comments

Mayfield today announced that it has closed its twelfth fund with $375 million in capital commitments. The news comes about one week after this space reported that at least seven brand-name limited partners has opted not to re-up, due mostly to a combination of lousy returns and a serious disagreement over the way in which Mayfield went about paying off clawback liabilities on its eighth and ninth funds. I’ve got a bunch of Mayfield thoughts in no particular order, so here goes:

***I spoke yesterday with Kevin Fong, a Mayfield managing director who basically runs the firm along with Yogen Dalal. This was my first conversation with anyone from Mayfield since first hearing of the clawback/management fee issue in July, as the firm and its representatives had basically ignored my multiple calls and emails requesting comment (most likely because it was in fund-raising mode). Considering what I had written, my ears were prepared for a good deal of yelling.

But there were no raised voices, nor any suggestion that the column contained inaccuracies. Instead, Kevin was fairly contrite, acknowledging that returning to the LP community after five or six years of low returns was difficult and humbling. He wouldn’t go into specifics about the clawback/management fee issue, but did say that he was “saddened” by the LP sentiments expressed in the column. What was a bit difficult to tell upon re-reading my notes, however, was whether his sadness related more to the fact that LPs actually held such sentiments, or that they had chosen to air them publicly. Below is part of the interview:

We were really saddened by the comments that were made [by the LPs]¡­ We pride ourselves on having very good LP communications, and encourage LPs to tell us both the good and the bad on a one-to-one basis¡­ We were very forthcoming to our LPs, and we believe we responded appropriately, and only acted on amendments that were viewed and signed by our LPs¡­ We also viewed those communications as one-to-one, and are disappointed by the fact that some LPs have chosen to use an alternate public channel to vent their frustrations¡­ Clearly we haven¡¯t done our job in encouraging them to get to us directly.

Again, I don’t quite know what to make of this, particularly since almost all of the LPs I spoke to in Funds VIII and IX had, indeed, made their frustrations known privately, and took them public after the private avenue had failed. Moreover, while the amendments did, indeed, pass, they went through several stages and ultimately were not signed by all LPs (i.e., a formal protest against the decision).

All in all, however, Kevin certainly understands that Mayfield has to produce in order to keep its brand shiny, and seems willing to do it. He also stressed that the firm remains a fiduciary to many of the LPs who didn’t return, and that it will obviously honor that commitment.

*** Mayfield certainly was paying attention to its recent bad pub, judging from the press release. Its second paragraph states: “The majority of the commitments of Fund XII derived from long-standing limited partners.” Later, CFO and managing director James Beck is quoted as saying: “Mayfield XII brings together a diverse and discerning group of investors.” Indeed, 75% of the commitments came from existing LPs. While this certainly is laudable, it does not address those who dropped, nor the fact that the fund itself is about 60% smaller than its predecessor (i.e., could have easily been filled with just 40% of existing backers maintaining pro rata stakes).

***