What the Hellevation?

I’ve been considering a print piece on Elevation Partners, which has only closed three deals since closing its $1.8 billion debut fund in 2004. My basic interest isn’t why a firm with so little activity has received so much press attention (over 1,000 print mentions to date), as the obvious answer is Bono. Instead, I’m more curious if LPs were getting nervous about the seemingly-slow pace.

But there just doesn’t seem to be enough there there.

The nascent portfolio actually represents a significant portion of Elevation’s capital under management – in part because two of the deals are platform companies. Specifically, it committed an estimated $300 million to a joint media venture with Forbes (in exchange for a minority stake in the publisher), and made a $300 million commitment to video game publisher BioWare/Pandemic Studios. It’s first deal was a $100 million PIPE deal for Move (Nasdaq: MOVE). All together, that’s $700 million of a $1.8 billion fund, or around 39 percent. Kind of like the heavy-concentration strategy employed by Garnett & Helfrich Capital.

In addition, LPs usually give new partnerships at least three years to get things together. Those who did express some mild concern with Elevation’s pace – particularly given its inconsistency with the market-at-large – said that it was still a bit too early to bring issues to the fore…

So this one goes back to the storyboard, to be revisited at a later date.