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The Results Are In To Semaphore's 2018 Confidence Survey!

Semaphore's 2018 Confidence Survey Highlights

Could it be possible that there be near universal confidence in the national economy, our own skills, the ability to earn more and more and hate president Trump, Congress generally and its leaders?  Well, in our Alice in Wonderland PE world, it is not only true but seems quite normal - continuing the trend expressed in last year’s survey.  Note that we also live in the real world. In this #MeToo moment our industry at least recognizes it is wildly deficient with 80% recognizing, (self-admitting?) that sexual misconduct, harassment and gender bias is an industry problem. The question left hanging is what to do about it. You obviously disagree, thankfully, with the respondent who wrote “It's being blown way out of proportion. The end result now is men will fear doing business with women.”  Many suggested that transparency was the prescription but most believing that it will only ease with a generational change in leadership and more women participants in the industry. If this survey is a guide it will take a very long time as only 14% of our 589 respondents were women. One bluntly stating, “I have had a front row seat. It is destabilizing, demoralizing, divisive and completely unacceptable behavior…” Accompanied by another comment noting, “It is an industry of big egos with little regard for others.”

Big egos indeed.  The 10th annual Semaphore Confidence Survey clearly notes we are Uber Confident (not necessarily confident in Uber but more the original meaning of that now spoiled word) with 93% confident in themselves. While some fear exigent existence, “The Dow will climb but the stock exchange will no longer exist once Trump chooses to press his Big Nuclear Button to show the world how big his…” well, you’ll have to go to the comments section to read the unexpurgated rest of the comment.  

Last year’s survey had 76% fully expecting to earn more money.  Congratulations - 73% of you did with 74% expecting to continue that upward trend this calendar year. And your personal taxes and corporate taxes will go down too, as 57% and 70% correctly predicted last year with 55% of you agreeing that the personal income tax rates will advantage you and about the same number believing the tax rate cuts will spur the national economy.

You were equally correct in that 78% predicting that the currently favorable tax treatment of Carried Interest income would not be at risk and 88% certain there will be no change in 2018, despite the fact that nearly half of you believe it should be changed.  

That confidence continues not to be shared with few other people or institutions. While President Obama fared extremely well last year (78% on the confidence scale) his successor only had a 18% confidence score, with 74% not confident.  President Trump even outscored our perennial last place finisher in the confidence polls with Congress (71% no or little confidence)  with Speaker Ryan and Senate Majority Leader “enjoyed” a 25%  and 16% confidence vote, respectively.   They won’t have to worry about those poor ratings much longer as 72% of our respondents believe that either the House or Senate become Democratic in the 2018 mid-term elections.  Makes me wonder if Nancy Pelosi and Chuck Schumer read our blogs?

For the third year in a row sectors of investment remained essentially static. Health Care, Enterprise Software, and Financial Services are #1, #2 and #3. Those three sectors remain the top three targets of investment in 2018 with Crypto Currency and Entertainment in the top 5

The distribution of respondents in the US changed only slightly from past years - the  top six states were 33% California, 22% Massachusetts, 21% New York, 6% Texas and 5% Connecticut (the last two swapping places). Washington DC, Pennsylvania and Illinois came in at 4% each.

The UK represented 31% of international respondents, 14% Canada, 7% Germany, 6% China (up from 2%), and 2% from both France and Italy, with multiple respondents from Australia, Singapore, the Philippines, Taiwan, Brazil, Russia, Japan, Peru, Spain, Viet Nam and single responses from10 other nations.

Of those who participated this year 15% were from PE shops (half last year’s number); 31% were VCs; 14% were LPs (double last year); 13% were operating executives; 7% were Investment Bankers; and 20 % were third party vendors/advisors to the industry (lawyers, accountants, etc).

I have no idea what our dog’s breakfast of results means but we’ll all find out in the next 11 months and we’ll be sure to be asking once again next year. If you can take the time away from gazing at your burgeoning net worth or from fears of political apocalypse please review and analyze the full results and read many of the comments by clicking here

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore, www.sema4usa.com, is a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for nine funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

 

Topics: Survey, Semaphore

Semaphore's 2018 Annual Survey Is Here!

Semaphore’s 2018 Confidence Survey

Professionals in our industry seek to invest in disruptive technologies and investment markets.  We all thought 2016 was a turbulent political mess. How much more disruptive was 2017? Could 2018 be even more so?  From tweets to tax cuts and sexual misconduct to crypto currency we experienced a pillar to post whipping.  How did it affect your pocket book and personal confidence?  There was absolute clairvoyance by our colleagues in last year’s survey.  Fully 70% of you predicted corporate tax rate cuts.  Another 57% predicted personal income tax cuts. It took until the last days of the year but our colleagues’ predictive powers proved accurate and prescient. A strong majority remained confident in the US and Global economies.  Only 25% had prospective confidence in President Trump in 2017. If stock market performance and political surveys can be believed you were once again fully on target, all the while believing that your incomes would continue to rise.  Our colleagues thought it would be, once again, a fat and happy year.  Was it as people expected?  Do you expect to make even more personal compensation next year than this year?

Annually we ask our readers to weigh in and share their level of confidence in themselves, the economy and their businesses. This year we ask your predictive powers on a range of issues and query directly whether sexual misconduct, harassment and gender bias is a problem in our industry.  You’ve never been shy before and we anticipate continued honest responses.

Semaphore is conducting its tenth annual survey of Private Equity and Venture Capital partners, principals and professionals supporting the industry. The purpose of this survey is to gather anonymous input from our industry friends and clients with the results fully reported to all. The survey will stay live through January.

By participating you will get to gauge your expectations with your peers, competitors and industry colleagues. The survey will take 2-3 minutes and respondent identity will not be reported to us.  Results will be published in Fortune’s Term Sheet and on our website www.sema4usa.com.   

Click here  to take the survey.

Click here  to see last year's results.

Semaphore, www.sema4usa.com, is a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for nine funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Semaphore, Survey

The Results to Semaphore's Annual Confidence Survey Are In!

Semaphore's 2017 Semaphore Confidence Survey Highlights

All Trump. All the time. Why should the PE community be any different?   The often virulent opinion directed at the President and attendant fears about the capacity of the White House team appears to have no deleterious personal effect on our brethren.  Despite being frightened about Trump our respondents are highly secure about doing well professionally, despite their White House fears. 

The 9th annual Semaphore Confidence Survey is nothing if not entertaining and has enjoyed a reasonable level of accuracy.  While some fear goose stepping brown shirts, “So....this is what Nazi Germany felt like in the beginning.” And, with apologies to Neil Young, “Only Trump can break your heart...and the national will,” we hope neither of those comments proves true.  Last year’s survey showed a trend where, for the first time, our colleagues were reporting not only that they earned less in 2015 than the year before but that they expected their income to go down once again in 2016.  Nope.  80% reported they earned more in 2016 and fully 76% expect to continue that upward trend.  

And apparently Trump will remain good for the 1%.  Sticking to personal income, 57% believe personal income tax rates will drop in 2017 and a full 70% are certain a drop in corporate income taxes will follow.

Notwithstanding Trump’s oft repeated campaign trail pledge to end the currently favorable tax treatment of Carried Interest income only 22% believe he will fulfill that promise. If those 78% are right there is little doubt that the prediction of increased personal income, coupled with drops in corporate and personal income taxes will afford a true personal triple witching hour. No wonder 93% are confident in themselves.

That confidence is shared with few other people or institutions. While President Obama fared extremely well (78% on the confidence scale) his successor only had a 22% confidence score, with 61% not confident.  For some reason, our perennial last place finisher in the confidence polls is Congress (67% no confidence) enjoyed a 21% confidence vote which is 4 or 5 times its usual scoring.

Our respondents continue to be blunt and one of my favorite comments this year was full of industry hubris “Industry, not the president, will continue to create jobs and economic vitality in many sectors.” They present very certain opinions such as “2018 is when the wheels start coming off the bus,” while believing that “2017 will be the year of M&A/IPOs.” Hello Snapchat.

Sectors of investment remained essentially static. Health Care, Enterprise Software, and Financial Services are #1, #2 and #3 in 2016. Those three sectors remain the top three targets of investment in 2017 with Consumer Products and Entertainment breaking into the top 5

The distribution of respondents in the US changed only slightly from past years - the  top six states were 34% California, 21% Massachusetts, 19% New York, 5% Connecticut and 5% Texas. Washington DC 4%, Pennsylvania and Illinois came in at 3% and no other state represented more than 1%.

The UK represented 31% of international respondents, 15% Canada, Germany 9%, China 2% and 2% France, with multiple respondents from Australia, Singapore, the Philippines, Brazil, Russia, Japan, Peru, Spain, Viet Nam and single responses from11 other nations.

Of those who participated this year 30% were from PE shops; 26% were VCs; 7% were LPs; 9% were operating executives; 11% were Investment bankers; and 17 % were third party vendors/advisors to the industry (lawyers, accountants, etc).

Our second year of gender queries showed slightly more diversity with   81% male (89% last year) and 19% female (11% a year ago).

Last year our group overwhelming predicted the correct finalists for President even before the primary votes started.  However, Fully 83% believed Clinton would win the election. Someone I know walking the woods of Chappaqua, NY wishes our colleagues were correct…alas.

I have no better answer for my annual question of what does it all mean. We’ll find out together next year.  If you have time to tear yourself away from getting richer in the face of Armageddon please review and analyze the full results and read many of the comments by clicking here

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore, www.sema4usa.com, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eight funds, is a New Markets Tax Credit provider and advises Limited Partners around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Semaphore

No Sand Between Our Toes (2016)

Why being at the bar won’t get you a drink but will make your dermatologist smile.

I’ve been spending my summer with lawyers.  It’s not a sentence for misbehavior or because I’ve committed some wrong.  It’s not been at BBQ’s or quaffing beers with my friends at the bar (groan) telling enhanced memory college war stories while listening to the surf above the clatter of conversation. We have not even been competing at Rio inspired beach volleyball pretending each slam - if we could actually jump high enough to make one over a regulation net - was for the gold medal winning point.

Nope.  It’s been nose to the grindstone reviews of complaints and counter complaints, pleadings, filings, hearings, motions, and depositions.  And it’s been fun! Now, not the fun of an exhilarating boat ride against a swift current or being elbow deep into a great steamed lobster fest.  Rather it’s been the joy of winning a tactical position, discovering confirmation of an adversary’s transgression,  laboring under the responsibility of being fully prepared to argue your belief against some very smart colleagues, enjoying the emotional fulfillment of knowing that you are right and having someone in a black robe affirm your belief. Yeah…that may seem like a poor substitute for being at the beach but as far as alternatives go it is certainly better than, say,  Disney World in August.

This year I have relished the privilege of a deep dive in litigation esoterica and SEC regulation, welcomed as a real-world contributor to strategy, even appreciated the more than occasional 2 o’clock in the morning email exchanges, and learned that being a “good” client working with open-minded and keenly intelligent lawyers makes for more than good results.  In our troubled fund practice over the last 15 years we often spurn law firm “help” – particularly at the crisis stage of an intervention as few law firms truly understand the practitioner level consequence of the standard legal playbook on a VC or PE practice that is more medieval than modern.  The vexing engagements we have been working this year required intimate assistance and leadership of a group of attorneys who, in concert with our replacement General Partner practice team, helped secure rights lost, arrested loss of value and fixed governance of particularly dynamically challenging circumstances.  The collective efforts of the Team have given our common Limited Partner clients progress and conclusions that any one of us independently would not have been able to gain.  So here’s a toast, to my friends at the bar who, while keeping me off the beach, have kept me engaged, stirred intellectually and appreciating the fire-power a well-crafted legal and operational strategy can have when dealing with wayward General Partners and the mess they leave behind.  

Here’s hoping next year we are all scrunching sand with beer in hand telling war stories about the terribly active summer of 2016.  Meanwhile our summer labor is not over. I think my lawyer friends spent less time than I did on whatever their version of a holiday may be.  Instead we are all seemingly locked in steel and glass towers under the glow of fluorescent lights rather than risk sunburn. Other than our clients, maybe only our dermatologists applaud the consequence of our busy summer this year!

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore, www.sema4usa.com, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eight funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: LP, VC, equity, ethics, business, Semaphore, venture funds, private equity, troubled funds, general partners, Venture Capital, business advisory, private equity funds

Semaphore's 2015 Confidence Survey

Semaphore's Annual Confidence Survey

Last year hundreds of you told us you hated Congress, thought the President was a failure and expected to make more cash than ever despite the denizens of Washington DC.  Feeling more confident or less confident in the President’s Economic team as we see a Republican House and Senate taking control of the Capitol? Have thoughts on your boss and competitors? Do you expect to make even more personal compensation next year than this year?   Annually we ask our readers to weigh in and share their level of confidence in themselves, the economy and their businesses.  Last year we heard significant levels of confidence – did it prove to be so? Especially as the stock market rose in a continuing bull market and reported PE/VC values (and deal costs) rose as well.

Semaphore is conducting its seventh annual survey of Private Equity and Venture Capital partners, principals and professionals supporting the industry. The purpose of this survey is to gather anonymous input from our industry friends and clients with the results fully reported to all. It will stay live until mid-January.

By participating you will get to gauge your expectations with your peers, competitors and industry colleagues. The survey will take 2-3 minutes and respondent identity will not be reported to us.  Results will be published in Term Sheet and on our website www.sema4usa.com.   We know you have opinions – share them with the world and please take the survey.

Click here  to take the survey.

Click here  to see last year's results.

Semaphore (www.sema4usa.com), is a leading global professional services provider of Private Equity and Venture Capital funds under management. Semaphore currently holds fiduciary obligations as General Partner for seven PE and VC funds, is a New Markets Tax Credit provider and advises General and Limited Partners around the world. Semaphore's corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Semaphore

No Sand Between Our Toes (2014)

Why our feet are not stuck in the mud.

I truly thought we might be skipping this 7th annual post – or have to retitle it “Feet Stuck in Mud”.  The cycle of summer seems to start only after the kids leave school and then return. My wife Tricia used to say “summer starts on the 4th of July and ends two weeks later,” and that sentiment brings near universal agreement –especially to those who have to pay attention to the back-to-school shopping rhythm and planning that truly does start in late July.     In truth, I was looking forward to an extended August respite because business was, well – just slow on the new biz development front.   No complaint, we are plenty busy and full of appreciation for clients and obligations we have right now. Our current collection of funds under management and associated portfolio companies are steaming along as we continue the work-a-day obligation of sustaining and growing value.   One of my favorites in the portfolio is going to crash through a $75 million run rate this year after plateauing near $25 million for the last few years.  Exciting stuff!  Our dozen plus Federal New Markets Tax Credit projects are either completed or in the ground, being particularly proud of the redevelopment of Liberty, Kentucky after its near total devastation by a tornado just two years ago.  We have even seen one of our completed University projects jump start an even more advantageous investment in a textbook demonstration of economic development leverage resulting in the creation of a fully privately funded nursing school. New jobs created, lives improved and strong emotional satisfaction from Florida to Oregon and San Antonio to New York City. 

So…what am I grumbling about?  In truth, we love the hunt for new fund and business opportunity.  We revel in the initial introduction to a vexing challenge.  It takes upwards of a year when we work with Limited Partners to help them understand the mitigation opportunities they have when they are involved with a troubled fund and/or recalcitrant General Partner.  All those months of free consulting – becoming intimate of the private troubles and competing interests, managing the diverse opinions and educating all parties about the complexities and opportunities of the intervention process  and the initial entry – is wonderfully exciting all by itself  (even if we don’t get paid for the effort).  I may be overselling that a bit but for those of you involved in biz dev I think you can more readily understand. 

We had at least two funds scheduled to come off the “contemplation and discovery” phase and move into “direct intervention” for the beginning of this summer.  However, for various reasons the engagements were put on pause until the fall.  We even demurred we step into one of those funds because we saw another path that would allow a repair of the GP/LP relationship twinned with some governance and oversight changes. Less income and work for us but it’s about doing the right thing for the client.  I will confess to missing the excitement of walking into a new challenge...alas. 

It was if we were planning to dig our feet firmly into the soft wet beach sand rather than trodding yet a few more airport terminals this August.  Then, just as the doldrums of summer were about to wash over us, BANG, a client crisis arrives.  Nothing is better than being able to stride into a maelstrom of doubt and fear that a challenging situation requires.  I can’t tell you about it just yet (on second thought, I’m likely to never tell you about it unless it becomes a heavily veiled business school case study) but I promise you we are enjoying the trials and pains of putting our clients at ease and reigning in the troubles caused by their badly-behaving GP. 

Maybe Tricia was right.  I did get the frantic initial Limited Partner call on July 20th. Summer did end two weeks after Independence Day.  Oh well, there is always Labor Day weekend.

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (www.sema4usa.com), a leading global professional services provider of troubled Private Equity and Venture Capital funds under management. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore's corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: troubled funds, equity, venture funds, private equity funds, Semaphore, Venture Capital, funds under management, general partners, limited partners, portfolio company, LP, private equity

Results of 6th Annual Semaphore PE Industry Confidence Survey

 

Confidence at All Time High

Results of 6th Annual Semaphore PE Industry Confidence Survey

 

By Mark S. DiSalvo

Is irrational exuberance on the horizon?  Will the Merry-Go-Round ever stop? Can the Masters of the Universe continue to rule? Notwithstanding the recent February Dow swoon the 2014 Semaphore Confidence Survey suggests No, No and Yes.
Extraordinarily, 91% of our over 500 respondents were confident in their own businesses, fully 50% higher than a year ago. 94% were confident in themselves, an all-time high, growing from78% last year.  In contrast only 31% of respondents expressed confidence in the President with 49% stating a lack of confidence in him, significantly above last year’s 37% number. As miserable as that may be it is decidedly better than the leader of the other branch of government, Speaker John Boehner, who has an 11% favorable v 66% unfavorable rating. As dreadful a rating for sure but it is far better than Congress as an institution with 87% expressing no or little confidence in our elected officials and only 1% offering an expression of confidence in the House or Senate.
In contrast some 80%, nearly double last year’s 43%, remain confident in the PE/VC Industry, while 6% express confidence in the US economy and less than half at 22% enjoying confidence in the International economy. This is expressed in the near wild enthusiasm around expected deal number and size.  96% reported completing between 1 and 4 deals and a similar number expecting to do the same.  More surprisingly is that over a quarter of us completed more than six transactions and fully a third anticipate exceeding that plateau in 2014.  And the deal sizes are growing.  Across venture and PE the average initial investment size is expected to be 50% larger in 2014 than last year. 
So what will all this prospective deal effort be in? Health Care investing shot to top in expected activity, up from fourth. Enterprise Software got bumped to #2 and Energy oriented investing rocketed to third place and last year was not even in the top ten.  With Business Services ranked fourth in prospective deal making with Digital Media and Financial Services tied for 5th place. Agriculture investment broke the top ten for the first time and came in a close 6th.  Gaming was not only out of the money but also failed to make the top twenty. Social/Community Technology, On-line Consumer Retail and Food rounded out our top ten deal hopes.  
And where does all this enthusiasm and confident take us. 77% expect to earn more than they did in 2013 with only 6% expecting to earn less. This on top of the fact that 65% earned more last year than they did in 2012 and 23% reported earning less.
For the second year in a row my industry colleagues continue to see the prospect of more income, more deal flow and high confidence in themselves, their peers, and industry. This clear read comparing the raw highlight data from the 6th annual Semaphore Confidence Survey with last year’s results suggests that our industry remains on the rise.  Too much more enthusiasm and consequent riches and our seemingly hated colleagues in Congress might find it more politically palatable to eliminate capital gain rates on carry.
The distribution of respondents in the US remained nearly the same from past years - the top five were 29% California, 16% Massachusetts, 11% New York, 6% Connecticut and 5% Texas with only New Jersey dropping out of the mix (guess the GW Bridge traffic might have been too heavy to get our usual Garden State respondents to reply). DC 4% and Illinois came in at 3% and no other state represented more than 1%. Our US respondents had reasonable confidence in their state governments with 26% expressing confidence - at least in comparison to the US Congress.    
International responses were quite different.  We had our widest ever distribution of respondents with only the UK remaining on top with 37% of all international survey-takers with (10 points higher than last year) followed by  9% Canada, 7% China and 3% France rounding-out the top four just as they did the prior years. We received multiple respondents from Germany, the Philippines, Brazil, Russia, Japan, Ukraine, Viet Nam and single responses from14 other nations including our first ever from Bora Bora (must have been a PE partner on vacation!). International respondents had depressingly poor opinions of their governments with 5% expressing confidence in their countries leaders, down from 7% in 2013.   
The 563 of us who did reply this year, up from 470 last year, was over weighted by third party professional participants compared to past years.  The mix this year compared to the last year was VC (24% v 39% ), Buy-out pros (25% v 24%), Limited Partners (6% v 13%) operating executives (7% v 6%) and third party professional (38% v 18%). Hmmm…charting this back to the income responses, perhaps the continued increase in income levels is attributable to the transaction fees and expenses associated with our explosion of deal numbers and values.
Comments this year were more muted in tone than past years and can be viewed on the survey highlights link below. Perhaps the tight bandwidth contributed to the lack of wit expressed.   Here is one none-too-pleased respondent commenting on the survey itself:
            “Well done, like an overly charred steak forgotten on a summer BBQ grill. Terrible survey.”
I hate when that happens as I like my steak very rare.
Hope everyone’s expectations are indeed met in 2014.  See you next year.
To see the highlights of the results of the 2014 Semaphore Confidence Survey please click here.  If you want to do your own comparison, the 2013 Semaphore Confidence Survey results are here.
Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (www.sema4usa.com), a leading global professional services provider of troubled Private Equity and Venture Capital funds under management. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore's corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: market diligence, troubled funds, Venture Capital, equity, investment, venture funds, technology, private equity funds, Semaphore, Venture Capital, funds under management, general partners, limited partners, turnaround, LP, private equity

Time To Take Semaphore's Annual Confidence Survey

survey resized 600

Do you expect to make more personal compensation next year than this year?  Feeling more confident or less confident in the President’s Economic team as we left government shutdown and the most recent Fiscal Cliff behind? Thoughts on your boss and competitors?  Annually we ask our readers to weigh in and share their level of confidence in themselves, the economy and their businesses.  Last year we heard mixed levels of confidence – did it prove to be so? Especially as the stock market soared and reported PE values were up – albeit not as high as the Dow.

Semaphore is conducting its sixth annual survey of Private Equity and Venture Capital partners, principals and professionals supporting the industry. The purpose of this survey is to gather anonymous input from our industry friends and clients with the results fully reported to all. It will stay live until mid-January.

By participating you'll get to gauge your expectations with your peers, competitors and industry colleagues. The survey will take 2-3 minutes and respondent identity will not be reported to us.  Results will be published in Term Sheet and on our websitewww.sema4usa.com.  Dive in.

Click here  to take the survey.

Click here  to see last year's results.

Semaphore (www.sema4usa.com), is a leading global professional services provider of Private Equity and Venture Capital funds under management and diligence services. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore's corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: troubled funds, technology, Semaphore, Venture Capital

Zombie Funds

 Apocalyptic Future or Salvation?

A few days ago Luisa Beltran of PE Hub asked whether and what we should call the now popular appellation “Zombie Funds”.  I responded to her with the following:

“Here at Semaphore we call them “clients”.  No need for a pejorative characterization. It’s rather matter of fact.   Often it’s because GPs and LPs become mutually misaligned (for instance, when a carry hurdle may never be met it just makes sense for everyone to move on – the GPs to other career interests and the LPs knowingly recognizing that a better more attuned option exists to manage out the fund).

Yes, in some high profile cases it’s because of fraud or malfeasance of a GP that we find ourselves stepping into General Partnerships at the request of the LP.  Certainly those are the notorious examples.  Funny in that the GPs we replace become our best references.  Notwithstanding, generally it’s just good business judgment to let an entity such as Semaphore step in to “refresh” the relationships and more easily get the fund portfolio to perform until appropriate liquidation of the fund. The former GP moves on to other more potentially lucrative experiences, the LPs gets a more profitable eventual liquidation and everyone’s reputation is salvaged.  So let’s commonly drive a stake into the heart of the Zombie mischaracterization and understand that end of fund life sometimes requires good and compassionate hospice care.“ 

Here is the link to some other responses - PEHub.  Take a look.  If you want to discuss this or have a challenging fund situation please write me at mdisalvo@sema4usa.com.

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Semaphore (www.sema4usa.com), is a leading global professional services provider of Private Equity and Venture Capital funds under management and diligence services. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: troubled funds, equity, private equity funds, Semaphore, funds under management, general partners, limited partners, turnaround, LP

Beach Blanket Bingo?

Semaphore Has a New Markets Tax Credits Summer Project

Spring has finally made an appearance to New England after a long winter.  Hot summer days spent languishing at the beach; margaritas by the pool or skimming on the lake in a new boat are moving their way to the front of everyone’s minds.  No one thinks of stifling days surrounded by paperwork with the sun shining through the office window…you know, the one with the broken air conditioner. While summer is a time for relaxing and rejuvenating, the Semaphore staff is going to be reviewing projects, diligently negotiating contracts, finalizing deals and closing multi-party agreements in order to fulfill our latest allocation of New Markets Tax Credits funding.  

Semaphore has been operating Pacesetter CDE since 2010 and last year entered into an agreement with its majority shareholders, Wells Fargo and Bank of America, to acquire 100% of the stock of the firm.  We are pleased to announce that a $30 Million New Markets Tax Credit Allocation has been awarded to us in the latest round from the U.S. Treasury Department's Community Development Financial Institution (CDFI) Fund.  Semaphore is one of just 85 Community Development Entities (CDEs) throughout the nation that has received an award this year.

The New Markets Tax Credit allocations have assisted hundreds of low-income communities with the help of private investment capital.  We are excited that our good fortune allows us to actively continue to participate in revitalizing communities and creating jobs to improve distressed areas around the nation. So…while you are enjoying your sun filled activities, keep us in mind if your beach towel discussions turn to equity investments in low income communities; we would love to hear about any projects in which you think we can assist. 

Have a safe and profitable summer!

Louise Martineau is the Director of Operations at Semaphore. Semaphore (www.sema4usa.com ) is a leading global professional services provider of Private Equity and Venture Capital funds-under-management and diligence services. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore's corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: investment, private equity funds, Semaphore, new markets tax credits, Announcements

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