Tech. Vet Plans To Use VC Insight In New P.E. Fund

Oct 31 2006 | 10:50am ET

Bill Burnham once worked as a sell-side analyst in the famous, or should we say infamous, technology group headed by Frank Quattrone at Credit Suisse First Boston. Now he hopes to capitalize on some of the regulatory consequences resulting from those dark days.

Burnham’s new private equity shop, Inductive Capital, launched on Oct. 1. According to Burnham, he plans to use what he learned in six years as a venture capitalist in Silicon Valley to invest in public companies.

“When I came to the venture capital industry from Wall Street, one of the things that struck me was the connection in the technology market between the private and the public world. In fact, a lot of private companies operate in the same markets, have the same customers and experience the same trends as the public companies do.”

Burnham left CSFB in 1999, before the bubble burst and Quattrone’s troubles with the law began – “I picked a good time to leave,” he says. But he argues that one of the new regulatory regime’s unintended consequences “has been the evaporation of sell-side research coverage in the small- to mid-cap tech space.”

Along with a decline in the amount of disclosure among publicly-traded technology firms, Burnham says there’s an opening for a fund which approaches public firms with an understanding of the trends affecting private technology companies.

“It’s actually increased the importance of understanding what’s going on the private space relative to the public space. A lot of high-tech money is still run out of New York and Boston,” says the Menlo Park, Calif.-based Burnham. “That frankly doesn’t make a whole lot of sense to me.”

For now, the fund, which has less than $100 million in assets, has a fairly homogenous group of investors: Silicon Valley VCs like Burnham himself, technology CEOs and other “high-tech types.” Burnham says he will evaluate at a later date whether to accept more investors.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.