.-- ---- - ".- .,-.-Some of the biggest ven- tions ' t f i a f worked on ' index Ventures, the EL&& pean venture capital firm ture capital fundraising in E750m h f f s a t i o n of BOXbest-known for its invest- the US last year was for clever in 2002 - troubled Gerlater-stage investing, such as man lender WestLB and c f B r - -- -,--;T1'y* the $3bn raised by T6chnol- -ads The. deal would make ogy Crossover Ventures, the Silicon Valley fund, and the Terra Firma the only $ a m fund raised by Carlyle remahi+ defendant in the ogy companies. Group for "growth capital". long-mmng lawsuit, thrustEurope is catching up, as ing the fjrm's financial modWhile Index will continue investing in start-ups, the later-stage investments rose elling work on the securitiSwitzerland-based firm's 44 per cent to C593m in the sation into the spotlight. The unexpected shift move into later-stage ven- third quarter of 2007, lifting ture capital mirrors US the median deal size to a comes as WestLB's owners record of more than €3m, announced plans to inject growth of similar funds. Investments in later-stage according to Ventureone €2bn into the bank to offset expected 2007 losses and companies already generat- and Ernst & Young. US venture capital firms temporary writedowns. ing strong revenue growth The settlement is unlikely are less risky than tradi- raised $6.2bn to target more tional venture capital, which mature companies in the to be cheered by Terra often involves backing ideas first half o f 2007, against Firma head Guy &ds, the before they reach market. only $2.3bn in all of 2006, legendary dealmaker curIndex has hired Dominique according to Thomson rently focused on EM1 after Vidal, the former chief exec- Financial and the National a E3.2bn takeover of the utive of Yahoo Europe, and Venture Capital Association. music group. Sources close Mr Vidal said his firm had to the lawsuit said the sue Guido Magni, former global head of medical science at already made investments in of Natixis's claim - if sucRoche, to lead the invest- later-stage companies, such cessful - could strain the priment teams of the new fund. as Russian e-commerce web vate equity group. "All guns Mr Vidal told the Finan- site Ozon, which last year are now squarely focused on cia! Times: "The European raised $lam in a fundraising Terra Firma," said one. venture capital industry is round led by Index. A formal announcement of not very old. We're talking Last week, Index was cele- the settlement is expected about an industry that is brating the success of its tomorrow at the High Court. 1&15 years old and this has investment in MySQL, the Natixls's case against the put a lot of money into com- young technology company firm centres on whether senpanies, some of which are that was acquired by Sun ior Terra F'irma employees now maturing." Microsystems for Slbn. were warned that certain He said the fund would Other notable investments finaocial projectkm for Boxmake about 15 investments by Index include Betfair, the clever were flawed, but worth an average of 625m in betting exchange, FON, the failed to inform investo~s. companies growing revenues global wifi network, and Boxclever, created in 2000 by at least 25 per cent a year Addex Pharmaceuticals, by a merger of several equip and with revenues of about which floated last. year with ment rental companies, ElJmB20m. It has offices in a market value of €%Oin. -".aeftiedWlua a-9ear&es.
Schumer, the influential New York senator, have begun voicing concerns over the role and transparency of foreign state-controlled entities. Mrs Clinton, a Democratic presidential frontrunner, told a debate in Nevada last week: "I am very concerned a b u t this. "We've got to know more
Citigroup and Merrill Lynch's standing among US citizens has plummeted as a result of multi-billion dollar capital injections by sovereign wealth funds, according to new research that highlights simmering public opposition to investments by Trust in Wall Street hit by foreign bailouts foreign governments. Over half of the 1,000 peoMenill Lynch ple polled by the market % of respondents research group Strategy One said they "trusted Citigroup less" after its recent decision to tap Middle East- Trust somewhat ern and Asian sovereign funds to ease its financial .,.., constraints. In Merrill's case, 45 per cent of the respondents said their trust in the bank had fallen since hearing of i+Tpiii%%X£~:.'?K+..; . .. investments from foreign & state funds, according to the &;2. . - . . 0' 10' 20' 3 0 ~ 4 0 .~ ' 0 research to be published day. Sourn: StrategyOne BasedOn a wNeyOf low The negative public ~
the deal was closed, plunging WestLB into crisis and forcing the resignation of its star banker, Robin Saunders. Like most securitisations, the Boxclever financing was based on a highly complex model of the business's future cashflows, such as its income from television
tisation was completed, with WestLB and CIBC serving as joint lead managers. Natixis, which bought E200m of Boxclever debt from CIBC in October 2002, says it lost nearly half that amount when the company defaulted on the notes the following year. The French rental t s . bank is seeking around Terra Frrma, then known £135m in damages, including as Nomura Principal interest and legal costs. Finance Group, worked on Terra F'irma denies wrongmore than 200 versions of doing and claims th& tda@.ePcw&ef?r~p~~,,& as-..slead ~- map&+
Americans lose faith in Citi and Merrill response to cash injections that helped Citigroup, Merrill Lynch and other Wall Street banks to cushion the blow of the credit squeeze underlines growing fears over the role of sovereign wealth funds. After initially welcoming the capital infusions, politfcians such as Senator Hillary Clinton and Chuck
~ e G F i r m chief a Guy Hands fa& a potential pay-out In excel
about them, they've got to be more transparent." The new research - can-ied out early this month between the two waves of foreign investments in Citigroup and Merrill - also points to an underlying current of protectionism within the US public, which could be exacerbated by the rising tbreat of a recession. "The Citigroup figure is staggering," said Laurence Evans, president of Strategy One, which is owned by the public relations group Edelman. "There is a xenophobic element to it. The biggest concern is uncertainty: people don't know how much influence sovereim - wealth funds will have." , Citigroup raised more than $20bn from investors including the Abu Dhabi Investment Authority and the Government of Singapore Investment Corporation. . Merrill Lynch received more than $12bn from investors such as Singapore's
Temasek and the Kuwait Investment Authority. Both banks declined to comment. , However, they have both stressed that the new investors have bought minority stakes and will not get any board seats or management role. Nevertheless, only 4 per cent of Americans polled by Strategy One said they ' trusted Citigroup or Merrill more after the investments, with about one in four saying the sovereign funds' presence had not changed their perception of the two companies. Mr Evans said Citigroup appeared to be more closely associated with the troubles stemming from the liquidity crunch &an Merrill, probably because of its large retail! banking presence. ;. When asked whether they had heard of .Citigroup in relation to subprime or mortgage lending difficulties, 41 per cent of respond-. ent said yes, compared with! 37 per cent for Merrill. ;$ ..