And Mavromates makes three. That’s the number of senior investment personnel that the $50 billion Massachusetts Pension Reserves Investment Management Board has lost within the last year. The latest to leave is Stanley Mavromates Jr., the pension’s chief investment officer since 2005. He announced he is joining Mercer, the Marsh & McLennan-owned consulting firm, as its chief investment officer, in late June.

Mavromates has been a key figure in MassPRIM’s efforts over the last several years to boost contributions to alternative investments, including private equity. As of April 30, MassPRIM had $5.7 billion in invested private equity capital, or 11.4 percent of its portfolio. That’s 1.4 percent over its 10 percent private equity target.

MassPRIM returned 22.3 percent in fiscal 2011, which is among the nation’s best returns for public pensions. That same year, its private equity program returned 17.1 percent.

“Stan [Mavromates] has been a major defining characteristic for PRIM over the course of the past decade-plus, and in a very positive way, and Stan has not only contributed tremendously to PRIM’s great performance and success, but has also contributed tremendously to PRIM’s positive culture,” MassPRIM Executive Director Michael Trotsky wrote in a note to staff.

Mavromates joined MassPRIM in 2000 as a deputy chief investment officer in February 2000, according to his LinkedIn profile. He held that position until March 2005, when he was promoted to CIO. Before joining MassPRIM, Mavromates spent 11 years as an investment officer at John Hancock Life Insurance Co., his profile states.

Mavromates’s departure could be another casualty of the inferior compensation typically available at public pension systems compared to similar opportunities in the private sector. At MassPRIM, the compensation issue was apparently severe enough that the system formed a compensation committee specifically to find ways to boost pay and incentives.

Mavromates did not respond to calls seeking comment on his departure.

His decision to leave MassPRIM adds to the growing number of vacancies among CIO roles at the nation’s largest pension funds. Among the pensions still looking to fill CIO positions are the $140 billion New York State Common Retirement Fund, the $73 billion Oregon Investment Council, the $72 billion North Carolina Retirement Systems, the $25 billion South Carolina Retirement System and the $11 billion Los Angeles City Employees’ Retirement System.

Mavromates departure follows those of two other key members of MassPRIM’s private equity team: Wayne Smith, who had headed the private equity portfolio, and his deputy, Michael Langdon. Smith went to Pathway Capital Management and Langdon to Hermes Global Private Equity.

Gregory Roth is a senior editor at Buyouts Magazine and peHUB. Follow his tweets @RothReuters. Follow Buyouts tweets @Buyouts.

Image credit: Photo of Beacon Hill courtesy of Shutterstock.

Palico, an online marketplace that was launched today, helps GPs seek out LPs and LPs discover investment opportunities offered by GPs, a spokesman says. Palico also helps placement agents secure GPs for their clients and gatekeepers find investors,. There are even opportunities for LPs to sell their secondary stakes, the spokesman says.

“Our ambition is to unite the fragmented, multi-trillion dollar global private equity fund community,” says Antoine Dréan, Palico’s founder and CEO, in a statement.

The service seems simple enough. For a flat annual subscription fee, a GP creates an online Palico profile which they can load with any information they want (like marketing documents). If the LP is intrigued, they can ask for confidential documents like a PPM. That’s when the LP reveals their identity, the spokesman says.

LPs can anonymously search for GPs in their area of interest while also comparing GP teams, fundraisings and secondaries. GPs can also send “Twitter-like” messages to LPs and gatekeepers interested in their strategy. Sellers that are looking to sell their stakes on the secondary market remain anonymous throughout the process, the spokesman says.

Palico has also secured broker-dealer licenses for their products, including fundraising, coinvestments or secondaries, which passport into 100 countries (including FINRA in the US and the European Union regulatory authorities), the spokesman says.

What doesn’t Palico provide? Advice. Palico is a self-service marketplace and any users need to use their own discretion and judgment, the spokesman says.

It’s also not clear how many members Palico has attained. Membership so far is 50% LP, 30% GP and 10% advisors, the spokesman says. “In this business, that’s a good mix. GPs want LP-heavy audiences,” spokesman says.

Palico, which has offices in Paris, New York and London, was co-founded by Dréan, who is also the founder of Triago, the global placement agent. Cédric Teissier, a former Debevoise & Plimpton attorney, is also a Palico co-founder and general counsel.

Photo courtesy of Shutterstock

By region, China accounted for the lion’s share of fundraising for the period raising $125 million, followed by India with $400 million and Brazil with $125 million. In terms of amount invested, China again led taking $1,814 million, followed by India with $1,051 million, Brazil with $682 million and Russia with $50 million.

Looking at performance of Asia-focused funds within CalPERS’ private equity portfolio top performers for the 30 September 2011 period include the 2008 vintage Asia Alternatives Capital Partners II which posted an IRR of 32.2% with a 1.5x multiple. Newbridge Asia III, with a more mature vintage of 2003 posted an IRR of 30.8% and investment multiple of 4.4x. Newbridge is part of the Texas Pacific Group fund family. CalPERS’ invesment in 57 Stars Global Opportunities Fund 2 also holds an impressive performer in Chinese venture fund GSR Ventures III which posted an IRR of 88.7% and 2.3 multiple for the period.

This week’s slideshow takes a look the performance of ten of the funds in global emerging markets investor EMAlternatives’ portfolio for the same period. CalPERS has committed $100 million to that fund manager which has a 2007 vintage and has so far generated an IRR of -0.3% and investment multiple of 1x. Vintages within EMAlternatives’ portfolio are still relatively young with the most mature at 2007. The top five performers to date are from 2008 funds, but time will tell as to how these emerging markets funds progress. As of 31 September 2011, Brazil was a top performer for the fund manager and last year saw the LP commit some $5 million to Brazilian fund Vinci Capital Partners II. Scroll down to see who the top emerging market performers so far are for EMAlternatives Investments.

Image credit: Photo of emerging markets signpost courtesy of Shutterstock

[slideshow]

[slide title=" 10. Vinci Capital Partners II-C LP "]

Region: Brazil

Investor: EMAlternatives Investments

Vintage: 2011

Capital Committed: $4,946,809

Total Value (Distributions + Value of Holdings): $537,873

IRR: -34.5

Multiple: 0.80x

[slide title=" 9. Giza Venture Fund V "]

Region: Israel

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $4,946,809

Total Value (Distributions + Value of Holdings): $2,584,181

IRR: -3.7

Multiple: 0.90x

[slide title=" 8. Pacific Alliance Special Situations Fund "]

Region: Asia

Investor: EMAlternatives Investments

Vintage: 2011

Capital Committed: $10,882,979

Total Value (Distributions + Value of Holdings): $2,916,444

IRR: -1.3

Multiple: 1x

[slide title=" 7. Maghreb Private Equity Fund II LP "]

Region: Morocco, Algeria

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $11,714,290

Total Value (Distributions + Value of Holdings): $9,058,328

IRR: -0.9

Multiple: 1.00x

[slide title=" 6. ChrysCapital V, LLC "]

Region: India

Investor: EMAlternatives Investments

Vintage: 2007

Capital Committed: $7,914,894

Total Value (Distributions + Value of Holdings): $4,750,271

IRR: -2.20%

Multiple: 1x

[slide title=" 5. DT Capital China Growth Fund "]

Region: China

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $7,420,213

Total Value (Distributions + Value of Holdings): $6,304,364

IRR: 6.7

Multiple: 1.2x

[slide title=" 4. Pacific Road Resources Fund, LP "]

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $7,420,213

Total Value (Distributions + Value of Holdings): $7,087,635

IRR: 7.9

Multiple: 1.2x

[slide title=" 3. SBCVC Fund 3 "]

Region: China

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $9,893,617

Total Value (Distributions + Value of Holdings): $6,506,107

IRR: 8.6

Multiple: 1.1x

[slide title=" 2. Turkish Private Equity Fund II, L.P. "]

Region: Turkey

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $10,683,400

Total Value (Distributions + Value of Holdings): $10,621,890

IRR: 12.7

Multiple: 1.3x

[slide title=" 1. Patria Brazilian Private Equity Fund 3 "]

Region: Brazil

Investor: EMAlternatives Investments

Vintage: 2008

Capital Committed: $9,893,617

Total Value (Distributions + Value of Holdings): $7,871,852

IRR: 13.4

Multiple: 1.2x

[/slideshow]

Separate sales on the secondary market by Blum Capital Partners, Clayton, Dubilier & Rice, Oaktree Capital Management, Sun Capital Partners would generate a total of more than $539.8 million.

In the largest offering of the four, CD&R, which bought a 47 percent stake in Sally Beauty Holdings from the Alberto Culver Co. back in 2006, generated more than $400 million in proceeds when it sold 15 million shares in the beauty supplies company for $26.49 per share (plus a repurchase by the company of 200,000 shares from CD&R), an increase of more than three times from its opening share price $7.35 as a new public company in November of 2006. EBITDA at Sally Beauty increased to $536.4 million for the year ended March 31, up from $259.7 million at the time the private equity firm invested in the company, according to Capital IQ.“It was at a point where we thought we’d transformed the company and the markets were recognizing that,” a source close to CD&R told Buyouts.

Oaktree Capital Management, meantime, generated more than $81.5 million in proceeds when it sold more than 3.6 million shares in Spirit Airlines at $22.51 a share, almost 50 percent higher than its debut offering price of $12 a share in its May 2011 IPO.

Department store chain Gordmans Stores Inc. on May 21 announced that an affiliate of Sun Capital Partners would offer 3 million shares at $16.75 per share in the company it acquired in 2008 and took public in 2010 at $11 a share, which would generate more than $50.2 million in proceeds. The company’s stock was trading as high as $17.57 per share on the afternoon of May 25.

Under Sun Capital, the company lowered freight costs, invested in technology and increased cash flow by improving inventory turnover, Jeff Magny, a vice president with the Boca Raton, Fla.-based firm, told Buyouts.  EBITDA at the company was $46.6 million for the year ended April 28, more than four times the $10.9 million of EBITDA for the year ended Jan. 31, 2009, according to Capital IQ. “From the time we went public to today, we were able to further improve profitability, which makes the stock very attractive,” Magny told Buyouts.

In the smallest offering, Blum Capital Partners sold 831,100 shares in Career Education at a minimum of $6.48 per share, generating proceeds of at least $5.4 million.

An extended version of this story will be published in the June 4 edition of Buyouts.

(CORRECTION: An earlier version of the story said that Gordmans Stores, backed by Sun Capital, had completed its stock offering. This version was changed to reflect that it had only announced the commencement of the offering on May 21.)

Image credit: Shutterstock

Bernard Vaughan is a senior editor at Buyouts Magazine. Follow his tweets @BVaughanReuters. Follow Buyouts tweets @Buyouts.

Bain is preparing to kick off fundraising by the end of June, sending out a private placement memorandum with the final terms of the new fund, Bain Capital Fund XI, the people said. Fund X, the previous fund, was $10.7 billion.

Bain Capital Fund XI will also receive a $600 million commitment from the firm’s fund managers to demonstrate alignment of interest, the sources said. A fundraising close could come as early as the first quarter of 2013, Bain has told investors.

Bain has told investors that a $2 billion co-investment fund will be raised alongside Fund XI and that access as well as terms that investors get on that fund will be tied to the size of their commitment to the core fund, the sources said.

Bain declined to comment.

(Reporting by Greg Roumeliotis in New York; Editing by Gerald E. McCormick)

Image Credit: Shutterstock.com

Felix Salmon: Why banks need to keep out of the CDS game

So what else is in Morgan Stanley’s IPO pipeline?

Two jurors excused in Gupta case

So who’s going to emerge in the RIM bidding game?

‘Member Him? My esteemed predecessor breaks the scoop on Sequoia’s new fund–a conservative vehicle, based on what else is going on out there!

No Halo: Who’s sailing and who’s flailing

More Good News for Sequoia

Non-Traditional Players? Foundry could tag-team with Detroit’s entrepreneur scene

Across the Atlantic… another argument against shale?

Solar and biofuels are the way forward for Australian renewable energy VC fund

Yahoo’s Yamli boosts Arabian VC investments

Black & Decker eyes up CVC‘s Singapore-based industrial fastener maker

Another Ones Bits the Dust: Nokia corp relations EVP goes to Harvard

Playfish co-founders take on more VC to fund educational games

Five things you may not know about Tim Cook

Image Credit: Jonathan Marino

Despite several requests to reach Edwards and get an official statement from the university, neither was made available.

Abbott, Edwards’s predecessor, stepped down as chief investment officer just six months after assuming the role in late 2010. At the time of his departure, the university issued a statement saying: “It had become apparent that his style of conducting business is inconsistent with Cornell’s policies and expectations.”

Cornell declined to elaborate on the reasons for Abbott’s exit saying it does not discuss personnel matters.

Edwards, who was elevated to the role of interim chief investment officer following Abbott’s resignation, had previously been, since March 2008, a senior investment officer at the endowment.

Cornell’s endowment, with $5.4 billion in assets, was the fifth-best performing endowment among the Ivy League’s eight universities during fiscal 2011, posting a 19.9 percent return in the year that ended on June 30, 2011.

Cornell had 19.5 percent of its assets invested in private equity as of June 30, 2011, or about $1.1 billion. Returns for the endowment’s private equity program were strong in 2011, posting gains of 27.8 percent.

The four best-performing endowments in the Ivy League over that time period also happened to be the largest. The Ivy League’s top performer was Columbia University, with a 23.6 percent gain. Yale University and Princeton University were tied for having the second-best endowment performance, with 21.9 percent returns, and Harvard University, which has the nation’s largest endowment with $32 billion in assets, returned 21.4 percent in the year ending June 30, 2011.

Gregory Roth is a senior editor at Buyouts Magazine and peHUB. Follow his tweets @RothReuters. Follow Buyouts tweets @Buyouts.

Image credit: Shutterstock

Before April 5, U.S. regulators only allowed donation-based crowdfunding projects, which raise money from the general public via the Web.

While businesses have used such sites to get working capital, they have generally taken preorders for yet-to-be-created merchandise instead of selling equity. But new possibilities are opening up because of the Jumpstart Our Business Startups (JOBS) Act, which President Obama signed into law last month.

The act provides crowdfunded businesses and investors with exemptions to the Securities Act of 1933, which prohibited people with a net worth below $1 million from investing in private companies. For the first time, businesses can advertise for investors without filing the standard disclosures required of companies with more than $1 billion in revenue.

The U.S. Securities and Exchange Commission still has 270 days from the JOBS Act signing to review and make final changes to its regulation, but if the statutes stay in effect as-is, just about anyone will be able to invest in a startup or small company.

“What’s new is being able to offer equity in return,” says Slava Rubin, chief executive officer and co-founder of major crowdfunding site Indiegogo.

“And it’s just the beginning,” said Rubin, whose site has helped fund more than 5,000 projects a month since he unveiled it at the Sundance Film Festival in January 2008. “We’re talking about a law that hasn’t changed in 79 years.”

So is a crowdfunded investment opportunity any different from pouring cash into junk bonds or penny stocks? It’s impossible to say, since the first crowdfunded investment offerings have not hit cyberspace just yet.

But they will soon enough. Since the beginning of May, at least two new investment-oriented crowdfunding initiatives have been announced — a partnership between EarlyShares.com and Navocate, and one by the US Crowdfunding Exchange LLC.

GETTING FLEECED?

Critics of the JOBS Act worry that small investors will get fleeced.

“Institutional investors can make choices based on the information they have,” says James Allen, head of capital markets policy for the CFA Institute, a global nonprofit organization of investment professionals. “It’s the mom-and-pop investors who are the bigger concern in this case, particularly the people on fixed incomes, the retirees.”

Allen says these people are vulnerable because under the JOBS Act, many investor protections (some put into place after the Enron debacle) have been bypassed.

Others, including Brookings Institution senior fellow Robert Pozen, also say the act will open a new avenue for stock scams and the highly speculative investing that gives birth to bubbles. Meanwhile, state regulators fear a Wild West mentality where unscrupulous wheeler-dealers, now able to bypass any disclosure requirements, could siphon millions from naive investors.

But supporters of the JOBS Act say the new legislation creates a sort of social media trading pit where entrepreneurs can now give everyday investors the possibility of getting in on the next Google or Microsoft.

Others who back the new law’s crowdfunding provisions say it will open up investor dollars to creating, as the act’s name suggests, new jobs. Even Allen acknowledges that crowdfunding comes at a time when “banks aren’t lending to small businesses, or much of anything. They don’t have much of an incentive.”

NEW RESOURCE

Members of the National Association for the Self-Employed view crowdfunding as a vital new resource for startups and job creation.

“This will really open the floodgates to a whole new arena of entrepreneurs who are trying to help other entrepreneurs finance their dreams,” says NASE CEO Kristie Arslan. “The great thing about crowdfunding is that it allows people to choose; you’re putting your business idea out there and asking people to invest in you and your idea. The good ideas will hopefully rise to the top.”

At least the money looks good.

Indiegogo now raises “millions of dollars a month” worldwide, Rubin says.

And Kickstarter, a 3-year-old major crowdfunding service, went from $1 million pledged per month in March 2009 to $7 million in March 2011. As of May 2012, more than $200 million has been pledged to more than 22,000 successfully funded creative projects, according to Kickstarter spokesman Justin Kazmark.

Among them was “Blue Like Jazz,” which smashed previous film crowdfunding efforts by more than $145,000. The movie adaptation of Donald Miller’s bestselling memoir came out in theaters nationwide last month to glowing reviews. Director Steve Taylor says that last year, the project seemed doomed because a financial backer walked out hours before production was to start.

Then two of Miller’s fans jumped in on Kickstarter and raised $346,000 in a few months. For their trouble, all the funders got thank-you phone calls from Taylor (it took him about a year to call back all 4,500 people), and those who gave at higher levels were offered bigger perks, including a cameo role in the film.

Will Taylor fund his next film in a similar way? He says he would not rule it out. But if he markets it as an investment opportunity, those who fork over cash will want more than a simple “thank you” — unless it’s written on the back of a check.

By Lou Carlozo, Reuters

(Editing by Beth Pinsker Gladstone, Chelsea Emery and Lisa Von Ahn)

Image credit: Crowdfunding concept photo courtesy of ShutterStock

Pack your bags! KKR is heading to Asia with a new fund

Mexx eyes the public markets

What have you done!?!? Did Facebook break the IPO process?

More trouble ahead for the Eurozone?

Chinese reforms on the cards to create its own Goldman Sachs

Could Europe’s economic woes really crush global recovery?

First Wind awards $65k in scholars program

San Diego tech giant Qualcomm joins forces with incubator

Polish companies reticent to sell out to PE

Snap Happy: Google’s secret weapon for social

Image Credit: Jonathan Marino

Arsenal Capital Partners

The  New York-based firm, which recently held a first close of about $300 million in commitments, has also negotiated with its investors to cap the fund at $825 million. That would comprise $800 million in commitments from investors and $25 million from Arsenal Capital professionals, the source said.

The target for the fund, Arsenal Capital Partners III LP, is $750 million. Investors will include sovereign wealth funds, the source said. Previous investors in Arsenal Capital’s funds have included international LPs such as Copenhagen-based ATP Private Equity Partners as well as U.S. investors including Adams Street Partners, RCP Advisors and the Oklahoma Police Pension and Retirement System.

Arsenal Capital typically invests $15 million to $75 million in deals with enterprise values of $30 million to $400 million; sectors of interest include specialty industrial, health care and financial services. In April, the firm generated more than 4x its invested capital in Novolyte Technologies when it sold the manufacturer of electrolytes used in lithium ion batteries to BASF, which should help the firm’s marketing effort.

Arsenal Capital was founded in 2000 by Terry Mullen and Jeffrey Kovach after they left Thomas H. Lee Partners. The firm has about 10 investment professionals, as well as 11 senior advisers and 12 operating professionals, according to its website.

Image credit: Shutterstock

Bernard Vaughan is a senior editor at Buyouts Magazine. Follow his tweets @BVaughanReuters. Follow Buyouts tweets @Buyouts.