Wharton Private Equity Conference highlights
Tom Schmittzehe, WG'03
Issue date: 2/9/04 Section: News
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On Friday 23rd January, the annual Wharton Private Equity Conference opened its doors for the tenth time. Forty-two panelist speakers, nine moderators, half-a-dozen keynote speakers and some five hundred students made the daylong conference and its small army of volunteer organizers proud - it was certainly one of the best Wharton conferences I have attended.
Breakfast at the rude hour of 7:30am kicked off the packed day at the usual venue of the Park Hyatt Bellevue hotel, with Dennis Kalenja and Jud Samuels(WG04), Conference Co-Chairs, and Simon Davidson (WG04), President of the Wharton Private Equity Club initiating proceedings. As they sipped their coffee, the audience learned of the great strides achieved by the PE Club over the year under Davidson's enthusiastic stewardship. The club now features amongst Wharton's largest and as the most active PE Club of any premier MBA school. The club can be credited to have captured well the persistently growing interest amongst MBAs for this elusive cottage industry. And British humour at its worst can be credited for Davidson's corny jokes. Still, the blueberry muffins went down a treat.
The first part of the day offered the attendees the choice between a panel on 'Large Cap Buyouts' and one on 'Growth Equity / Venture Capital'. I chose the latter, which was moderated by Fred Lipman, Private Equity lecturer at Wharton and partner at the law firm of Blank Rome in Philadelphia, who proved adept at squeezing the pearls of wisdom from the panel. The panel numbered five speakers, representing a refreshingly mixed panache of tastes. It included star names such as Apax Partners and Cinven, as well as some more exotic flavours such as Investor Growth Capital, which is a Scandinavian self-owned fund that invests globally and with significant interests in Asia.
The panel offered a number of key take-aways. Notable amongst these was that for the first time in a number of years some deals were beginning to attract multiple term sheets - a cautious sign that conditions are beginning to pick up. Warren Haber of Mellon ventures even went so far as to predict that 2004 would be pivotal, with corporations finally recovering from their hangover with the late 1990's and reinvesting in IT, especially in the realm of inter-company communications. Unlike during the bubble era, this would take the form of systematic and careful investment that could fuel entrepreneurial and VC activity. Indeed, it was suggested that the recent revival of interest in IT stocks fostered by Google's imminent IPO should not be seen as a new distortion. With real and abundant cash-flows, Google would be a safe IPO even in a sluggish market. How would this translate to the VC funds and their fundraising and recruiting prospects? Caution and delayed reaction was the consensus. Funds could still expect a full 18 months of overhang before investors could be approached again. Even then, new funds should be expected to be much smaller than in the Internet boom, with established VC firms finding the going a lot easier than fresh upstarts. Investors will push for greater transparency, funds will syndicate their investments more, and high returns will not be sustainable for all players. Some gloom, but some flickering light out there too.
Breakfast at the rude hour of 7:30am kicked off the packed day at the usual venue of the Park Hyatt Bellevue hotel, with Dennis Kalenja and Jud Samuels(WG04), Conference Co-Chairs, and Simon Davidson (WG04), President of the Wharton Private Equity Club initiating proceedings. As they sipped their coffee, the audience learned of the great strides achieved by the PE Club over the year under Davidson's enthusiastic stewardship. The club now features amongst Wharton's largest and as the most active PE Club of any premier MBA school. The club can be credited to have captured well the persistently growing interest amongst MBAs for this elusive cottage industry. And British humour at its worst can be credited for Davidson's corny jokes. Still, the blueberry muffins went down a treat.
The first part of the day offered the attendees the choice between a panel on 'Large Cap Buyouts' and one on 'Growth Equity / Venture Capital'. I chose the latter, which was moderated by Fred Lipman, Private Equity lecturer at Wharton and partner at the law firm of Blank Rome in Philadelphia, who proved adept at squeezing the pearls of wisdom from the panel. The panel numbered five speakers, representing a refreshingly mixed panache of tastes. It included star names such as Apax Partners and Cinven, as well as some more exotic flavours such as Investor Growth Capital, which is a Scandinavian self-owned fund that invests globally and with significant interests in Asia.
The panel offered a number of key take-aways. Notable amongst these was that for the first time in a number of years some deals were beginning to attract multiple term sheets - a cautious sign that conditions are beginning to pick up. Warren Haber of Mellon ventures even went so far as to predict that 2004 would be pivotal, with corporations finally recovering from their hangover with the late 1990's and reinvesting in IT, especially in the realm of inter-company communications. Unlike during the bubble era, this would take the form of systematic and careful investment that could fuel entrepreneurial and VC activity. Indeed, it was suggested that the recent revival of interest in IT stocks fostered by Google's imminent IPO should not be seen as a new distortion. With real and abundant cash-flows, Google would be a safe IPO even in a sluggish market. How would this translate to the VC funds and their fundraising and recruiting prospects? Caution and delayed reaction was the consensus. Funds could still expect a full 18 months of overhang before investors could be approached again. Even then, new funds should be expected to be much smaller than in the Internet boom, with established VC firms finding the going a lot easier than fresh upstarts. Investors will push for greater transparency, funds will syndicate their investments more, and high returns will not be sustainable for all players. Some gloom, but some flickering light out there too.