Employment And Training Jp Morgan


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Employment And Training Jp Morgan

  1. 1. J A N U A R Y 2 0 0 6 T H E B A Y A R E A   E   Q   U   I   T   Y     F   U   N   D     I,     L P
  2. 2. Bay Area Equity Fund I <ul><ul><li>JPMorgan, the Bay Area Council, and the Alliance for Community Development partnered to create the Bay Area Equity Fund I, LP, managed by JPMorgan </li></ul></ul><ul><ul><li>The Bay Area Equity Fund I, LP held its final close on June 30, 2004 at $75 million </li></ul></ul><ul><ul><li>JPMorgan’s focus is to deliver market-rate venture capital returns while driving social and environmental improvement in the Bay Area’s low and moderate-income neighborhoods </li></ul></ul><ul><ul><li>Investments are made primarily in private, mid-to-late stage growth companies with a focus on: </li></ul></ul><ul><ul><ul><li>Technology </li></ul></ul></ul><ul><ul><ul><li>Healthcare </li></ul></ul></ul><ul><ul><ul><li>Specialty consumer goods and services </li></ul></ul></ul><ul><ul><li>We co-invest with leading private equity and venture capital firms </li></ul></ul><ul><ul><ul><li>Abingworth, Burrill, Canaan, Domain, El Dorado, Kleiner Perkins, NEA, Sprout, Steamboat, Texas Pacific Group, Versant, </li></ul></ul></ul><ul><ul><li>Currently, the Fund has committed approximately 47% of the assets under management </li></ul></ul>1 B A Y A R E A     E   Q   U   I   T   Y     F   U   N   D     I   ,     L   .   P   .
  3. 3. BAEF Limited Partners Limited Partners by sector <ul><li>Non-financial corporations </li></ul><ul><li>Catholic Healthcare West </li></ul><ul><li>Insurance Companies </li></ul><ul><li>California State Automobile Association </li></ul><ul><li>Mercury Insurance Group </li></ul><ul><li>Pacific Life </li></ul><ul><li>PMI Group </li></ul><ul><li>Foundations </li></ul><ul><li>Dan and Stacey Case Foundation </li></ul><ul><li>F.B. Heron Foundation </li></ul><ul><li>Ford Foundation – PRI </li></ul><ul><li>John D. and Catherine T. MacArthur Foundation – PRI </li></ul><ul><li>Sand Hill Foundation </li></ul><ul><li>Peninsula Community Foundation </li></ul><ul><li>Annie E. Casey Foundation </li></ul><ul><li>Pension Funds </li></ul><ul><li>Contra Costa Employees’ Retirement Association </li></ul><ul><li>Banks </li></ul><ul><li>Citigroup </li></ul><ul><li>Far East National Bank </li></ul><ul><li>Greater Bay Bancorp </li></ul><ul><li>JPMorgan Chase </li></ul><ul><li>United Commercial Bank </li></ul><ul><li>Union Bank of California </li></ul><ul><li>Wells Fargo </li></ul><ul><li>USBancorp </li></ul><ul><li>Washington Mutual Bank </li></ul><ul><li>eTrade Bank </li></ul><ul><li>Schwab Bank </li></ul>2 B A Y A R E A     E   Q   U   I   T   Y     F   U   N   D     I   ,     L   .   P   .
  4. 4. Bay Area Equity Fund I, LP structure JPMorgan Bay Area Equity Fund I, LLC Limited Partners <ul><ul><li>2.0% management fee - JPMorgan </li></ul></ul><ul><ul><li>0.5% management fee - Bay Area Council </li></ul></ul><ul><ul><li>19% carried interest– JPMorgan </li></ul></ul><ul><ul><li>1% carried interest– Bay Area Council </li></ul></ul><ul><ul><li>1% carried interest– Alliance for Community Development </li></ul></ul><ul><ul><li>Pay 2.5% management fee </li></ul></ul><ul><ul><li>Receive 79% of carried interest </li></ul></ul>General Partners: JPMorgan and Community Partners 3 B A Y A R E A     E   Q   U   I   T   Y     F   U   N   D     I   ,     L   .   P   .
  5. 5. Current BAEF portfolio - Liquidity events <ul><ul><li>Realized </li></ul></ul><ul><ul><li>Peninsula Pharmaceuticals, Alameda, CA - $1.0 million (December, 2004) </li></ul></ul><ul><ul><ul><li>Filed for IPO in January 2005, acquired in June 2005 by Johnson & Johnson for $240 million </li></ul></ul></ul>B A Y A R E A     E   Q   U   I   T   Y     F   U   N   D     I   ,     L   .   P   . 4 <ul><ul><li>In Process </li></ul></ul><ul><ul><li>PowerLight, Berkeley, CA - $5.0 million (August, 2005) </li></ul></ul><ul><ul><ul><li>Filing for IPO (MSDW, JPM) in December, at a range of $300-350 million (approximately 3x return) </li></ul></ul></ul><ul><ul><ul><li>Right to sell 1/3 of position on IPO </li></ul></ul></ul>IRR analysis IRR analysis
  6. 6. Current BAEF portfolio –Operating highlights <ul><ul><li>Elephant Pharmacy, wellness retailer, Berkeley, CA - $2.16 million (June, 2004) </li></ul></ul><ul><ul><ul><li>Hired new CEO (Cost Plus), and new Executive Vice Chairman (Fresh Fields, McCown DeLeeuw). Opened second store in San Rafael in December 2005. To open in Los Altos in April 2006. </li></ul></ul></ul><ul><ul><li>ReShape, software for semiconductor design, San Jose, CA - $1.89 million (June, 2004) </li></ul></ul><ul><ul><ul><li>Now in customer beta tests with redeveloped hierarchical design software product. </li></ul></ul></ul><ul><ul><li>XDx, molecular diagnostics, South San Francisco, CA - $3.5 million (October, 2004) </li></ul></ul><ul><ul><ul><li>Began commercial operations early in 2004, now completed tests at transplant centers. Completed $26.5 million follow-on financing at increased price in December 2005. </li></ul></ul></ul><ul><ul><li>Efficas, nutraceutical developer, Boulder, CO - $2.25 million (October, 2004) </li></ul></ul><ul><ul><ul><li>Opened Richmond office, hired a CSO, evaluating 4 new compounds for acquisition: slated to generate significant revenue in 2006. </li></ul></ul></ul><ul><ul><li>FivePrime Therapeutics, biotech, San Francisco, CA - $1.0 million (February, 2005) </li></ul></ul><ul><ul><ul><li>Moved to Mission Bay in San Francisco, in-vitro validation of two leads, most productive screening quarter: 80,000 data points, 8 new assays, hits yielding several new proteins, 600 proteins added to screening set. Planning pre-clinical trials and evaluating potential partners. </li></ul></ul></ul><ul><ul><li>Bentek, manufacturing services, San Jose, CA - $0.50 million (April, 2005) </li></ul></ul><ul><ul><ul><li>Substantially profitable; diversifying beyond the semiconductor business. Won new business from Applied Materials, and expects continued growth in 2006. </li></ul></ul></ul><ul><ul><li>Labcyte, laboratory instruments for nanoliter samples, Sunnyvale, CA - $1.8 million (June, 2005) </li></ul></ul><ul><ul><ul><li>Since product launch in Q4:04, has sold into 7 of the top 10 pharma, with several of these key customers buying multiple units. </li></ul></ul></ul><ul><ul><li>PowerLight, solar power integrator/installer, Berkeley, CA - $5 million (September, 2005) </li></ul></ul><ul><ul><ul><li>Is a long-established US leader in deployment of large-scale PV systems with 59% of the US market from 2001 to 2004. </li></ul></ul></ul>B A Y A R E A   E Q U I T Y   F U N D   I ,   L . P . 5
  7. 7. Bay Area Equity Fund’s emerging social imprint <ul><ul><li>Job Creation </li></ul></ul><ul><ul><ul><li>In the next six months, Elephant Pharmacy will be creating approximately 120 new jobs for low and moderate income individuals in Marin and Santa Clara counties </li></ul></ul></ul><ul><ul><li>Agricultural Land Preservation & Sustainable Agriculture </li></ul></ul><ul><ul><ul><li>As a result of our investment, Efficas, a leading player in the emerging nutraceutical industry, opened its Bay Area office in Richmond </li></ul></ul></ul><ul><ul><ul><li>The Company will create agricultural jobs in Eastern Contra Costa county, where preserving agricultural land is a public policy priority, and take the lead in introducing a new high-value crop under sustainable agricultural practices </li></ul></ul></ul><ul><ul><li>Urban Renewal </li></ul></ul><ul><ul><ul><li>In November, FivePrime Therapeutics will become the first biotech company to locate in San Francisco’s Mission Bay neighborhood </li></ul></ul></ul><ul><ul><ul><li>Due to our investment in FivePrime, the BAEF team convened a meeting of key corporate, government and non-profit entities located in Mission Bay to identify and optimize efforts to serve the neighborhood’s low-income constituents. The second Community Outreach meeting occurred October 7 th , matching LMI residents in Mission Bay with funding and program sources from MBCO members </li></ul></ul></ul><ul><ul><li>Clean Tech Leadership </li></ul></ul><ul><ul><ul><li>In the next year, PowerLight will create approximately 30 new jobs for low and moderate income individuals in East Bay communities </li></ul></ul></ul><ul><ul><ul><li>Power light's IPO will help establish the Bay Area’s leadership in the developing clean tech industry </li></ul></ul></ul><ul><ul><li>Positive Impact on CA-wide and CRA policies and initiatives </li></ul></ul><ul><ul><ul><li>BAEF team is on CALCEF Board, contributed to the City of San Francisco’s proposal that won the Stem Cell research institute, participating in the Willie Brown Institute’s effort to modernize the CRA, building a relationship with the Greenlining Institute </li></ul></ul></ul><ul><ul><li>Human Resources Practice Council </li></ul></ul><ul><ul><ul><li>In response to varied performance practices and uneven information, BAEF will establish a council of HR Managers to review and promote best practices in HR area </li></ul></ul></ul>6 B A Y A R E A   E Q U I T Y   F U N D   I ,   L . P .
  8. 8. Brentwood Ceremony: June 13, 2005 <ul><ul><li>Efficas and the Fund convened a ceremony to highlight the successful initiation of a new high-value agricultural crop in the Agricultural Core of Contra Costa County and to show appreciation for all of the key government entities and farming constituencies who were instrumental in locating the optimal test plot location </li></ul></ul><ul><ul><li>Through the Fund’s relationships with Contra Costa County, introductions were made for Efficas to agricultural officials who played a critical role in identifying potential growers, locating an optimal site, and informing local growers of the benefits of the Efficas crop. The Fund also coordinated similar assistance for Efficas in siting its Bay Area office in an Enterprise Zone in Richmond </li></ul></ul><ul><ul><li>The ceremony marked the successful planting of a test crop for Efficas in partnership with Tom Bloomfield of the Bloomfield Vineyards in Brentwood </li></ul></ul><ul><ul><li>Participants </li></ul></ul><ul><ul><ul><li>Bay Area Council  Contra Costa County Farm Advisor </li></ul></ul></ul><ul><ul><ul><li>JPMorgan  Contra Costa County Agricultural Commissioner </li></ul></ul></ul><ul><ul><ul><li>Bloomfield Vineyards  Efficas </li></ul></ul></ul><ul><ul><ul><li>Brentwood City Manager  Mayor of Brentwood </li></ul></ul></ul><ul><ul><ul><li>Contra Costa County Board of Supervisors/CCCERA  Richmond City Council </li></ul></ul></ul>7 B A Y A R E A   E Q U I T Y   F U N D   I ,   L . P .
  9. 9. Current investment opportunities <ul><ul><li>Solaicx, San Jose, CA </li></ul></ul><ul><ul><ul><li>Innovating a process to manufacture high performance silicon for use in solar energy panels </li></ul></ul></ul><ul><ul><li>Photo TLC, Petaluma, CA </li></ul></ul><ul><ul><ul><li>Provides digital imaging gift products and photo restoration services for large retail stores like CVS, Walgreens and WalMart </li></ul></ul></ul><ul><ul><li>Fat Spaniel Technologies, San Jose, CA </li></ul></ul><ul><ul><ul><li>Has developed software and web-based integration services for monitoring and controlling the output of solar-electric systems </li></ul></ul></ul><ul><ul><li>eMeter, Redwood City, CA </li></ul></ul><ul><ul><ul><li>Developed software for wireless metering and maintenance of power transmission allowing large energy utilities like Jacksonville Electric and Texas Power to optimize their automated meter reading systems </li></ul></ul></ul><ul><ul><li>NuSewCo, Oakland, CA </li></ul></ul><ul><ul><ul><li>Mass customization service for branded retail apparel and bags for companies like Nike and Reebok (Adidas) </li></ul></ul></ul><ul><ul><li>Alvine Pharmaceuticals, San Jose, CA </li></ul></ul><ul><ul><ul><li>Developing enzyme therapy and other therapeutics for Celiac Sprue and related diseases, team and technology from Stanford University research lab </li></ul></ul></ul>B A Y A R E A   E Q U I T Y   F U N D   I ,   L . P . 8
  10. 10. Double Bottom Line Strategy Gets BAEF Into Deals <ul><ul><li>Elephant Pharmacy </li></ul></ul><ul><ul><li>At the time of the investment, Elephant Pharmacy considered the second bottom line focus of the Fund to be consistent with its corporate culture – an important consideration in accepting the Fund as co-lead, despite our reducing the valuation by 50%. </li></ul></ul><ul><ul><li>FivePrime Therapeutics </li></ul></ul><ul><ul><li>The company actively sought our investment to complement its own double bottom line initiatives, and persuaded its board and lead investors to carve out space in what turned out to be an oversubscribed round. </li></ul></ul><ul><ul><li>Peninsula Pharmaceuticals </li></ul></ul><ul><ul><li>Looking for outside investor to price their round, Peninsula selected BAEF in part because of the double bottom line strategy’s high correlation with the mission of management team and the corporate culture </li></ul></ul><ul><ul><li>PowerLight </li></ul></ul><ul><ul><li>The company rejected three large, prestigious private equity funds and preferred to work with BAEF in part due to our focus on clean technology and environmental issues in general </li></ul></ul>9 B A Y A R E A   E Q U I T Y   F U N D   I ,   L . P .