Confidence at All Time High
Results of 6th Annual Semaphore PE Industry Confidence Survey
By Mark S. DiSalvo
By Mark S. DiSalvo
Topics: Venture Capital, troubled funds, equity, private equity funds, Semaphore, funds under management, general partners, limited partners, turnaround, LP, technology, investment, market diligence, venture funds, private equity
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.“
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.
Leftovers and gratitude - a new Semaphore tradition.
By Mark S. DiSalvo
At my Thanksgiving Day table we go around the room and ask each family member (31 this year) to relate just what it is for which they are most grateful. Responses are variously funny (“my big nose so I can better enjoy the smell of that wonderful pecan and pumpkin pie” or “I’m especially pleased to be taller than my runt older cousin who always tortured me when I was a kid”); poignant (“that Mother’s dementia has allowed her to forget the pain of the past year and simply enjoy our family get together”) and variously serious (getting into a favorite university, the blessing of a new child, etc.). I’m sure it’s a tradition or experience that many other families enjoy.
On the Monday after the holiday, with my colleagues at our office lunch table, it was noted how I had not written a biz blog post for a couple of months. We agreed I should highlight the recent transaction where we acquired a New Markets Tax Credit platform and trumpet the recent investments. Somehow we got off on the tangent of family Thanksgiving expressions of gratitude. It struck us that we don’t do the same at work as we do in our homes. When the gang started discussing that very fact, we went from voicing gratitude for our good fortune to have interesting careers to bemoaning those, some of our relatives and friends that are up against it and pressed economically, in unproductive careers or who don’t have the privilege of a job at all. We discovered, in conversation, that our successes, in and of themselves are unimportant but that true satisfaction came in helping others get the same emotional fulfillment that we enjoy when we turnaround a fund or help a portfolio company earn a new customer. We were amazed to discover we’ve supported the creation of a few thousand jobs over the past decade and resolved, collectively, to see how we can ensure that the dignity of work is afforded to even more people as we continue to invest and nurture our current and future portfolio. The discussion turned to taxes and universally, albeit some of my colleagues begrudgingly, we understood that the moaning about an increase in marginal tax rates and an expected upping of capital gain was a tiny price for the benefit of our Semaphore Team working together and doing so in this engagingly challenging industry in a great country. Experiencing the ancillary profits of hard work as satisfaction, in and of itself, as well as the emotional stimulation of assisting entrepreneurs and stakeholders alike, we realized, was the true reason we labor. Sure, we like the monetary success but the sense of accomplishment when a business liquidates on its own terms and seeing the unadulterated joy of an entrepreneur actually accomplishing a dream is our most sustaining payoff.
Bottom line, we are privileged indeed. I think we’ll start a new tradition. Lunch table Thanksgiving. Nothing goes better with left-over turkey and stuffing sandwiches (with cranberry sauce, of course). Try it – establishing the tradition of asking your colleagues about what makes them grateful at work. You might find a new motivation and a reason to believe in yourself. The sandwich isn’t too bad either – lighter on the mayo next year.
Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (www.sema4usa.com), 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.