Random Ramblings: ComVentures, Bain and Gratitude

Last week, ComVentures announced that it had hired Bob Barron as a venture partner. I received the press release while in the middle of a phone conversation, and mentioned it to my conversant. His response: “Sounds like they’re trying to get some good news out before everyone learns about the bad news.” Unfortunately, he wouldn’t elaborate -- which nagged at me like the Johnny Damon Yankees jersey I recently saw hanging in a Greenwich Village bar.

But here it is: Jim McLean is leaving ComVentures, after having served as a general partner since 2000. The move has come as quite a shock to limited partners, who have now seen five general partners leave the firm this decade, following Paul Vabakos, David Helfrich, Perry Wu and firm co-founder Cliff Higgerson.

Well, maybe make that four. Higgerson originally was supposed to make at least one deal per year from ComVentures’ $350 million sixth fund, which closed in 2003 but didn’t call down any capital until 2005. That never happened, however, and Higgerson was removed from the firm website following late 2004 redesign. But now it seems that he is returning to do that one deal per year (or perhaps even more), which one assumes means either: (A) He agreed to return to that LPs didn’t completely freak out or (B) He left because of conflicts with McLean, which have now been removed. Either way, some LPs are beginning to regret their fund commitment. “Nothing worries me more than partnership instability,” one said.

Neither McLean nor anyone from ComVentures returned requests for comment.

*** Speaking of unannounced personnel moves, Doug Schrier has left Argo Global Capital for Rembrandt Ventures. For those with keen memories, Schrier had considered teaming up with Andy Fillat and Tony Abate to form an independent fund, until the latter paid opted to launch a VC program for American Capital Strategies. He was a senior director with Wakefield, Mass.-based Argo Global, and will be a managing partner with Menlo Park, Calif.-based Rembrandt.

*** Expect champagne corks to pop over at Bain Capital today, when the firm closes on $8 billion for its ninth core fund (a $2 billion co-investment fund will close in mid-April). This goes down as the single most impressive fund-raising drive in private equity history. First, Bain attracted more than twice what it raised in 2004 ($3.5b core, $750m co-invest). More importantly, it didn’t begin fund-raising until earlier this year, and substantially raised its target just over a month ago.

I had assumed that Bain’s extra capital needs would require it to engage in the type of public pension fund road-show that it had previously avoided. After all, how do you get to $10 billion without hitting up groups like CalPERS, CalSTRS, Oregon? But Bain didn’t need to do it, despite its poorly-justified transaction/management fee structure and miscalculations about how much cash was needed for its last fund.

Maybe it’s because fund managers love the Bain brand name (can’t get fired for buying IBM). Maybe it’s because Bain promised to do fewer big club deals (as have most mega-buyout firms this time around). Maybe it’s LP overhang. Maybe it’s returns, although the last fund is too young and its predecessor isn’t really an overachiever. Or maybe the why no longer matters.

*** The Blackstone Group also is expected to close its new fund today, with $13.5 billion. If successful, this would be the largest LBO fund ever raised. Well, the largest until Texas Pacific Group closes on around $14 billion sometime next quarter (yup, that’s your quiz answer).

*** Remember that strategic review of CalPERS’ alternative investment program? Well now it’s following up with some RFPs that will formally hit the street next week. Here’s a sneak peak.

*** Finally, much appreciation to each of you who sent notes of condolence yesterday. It meant a lot.