Though venture capital investment is down nationwide, funding to startups in Los Angeles surged during the second quarter.
Thanks in part to the abundance of media and advertising startups in the area, Los Angeles registered one of its best quarters ever, according to data released last week by Dow Jones VentureSource. Local companies raised $545 million in venture capital funding through 44 separate investments. The quarter is tied for the most active in at least five years.
The L.A. market also scored the nation’s largest venture capital investment during the quarter when the Chernin Group, a Santa Monica media company founded by former News Corp. executive Peter Chernin, secured $200 million in April. Overall, there were five separate venture investments of at least $30 million in L.A. companies, an unusually high number of big money deals.
Jeff Grabow, western region venture capital leader for Ernst & Young, noted that the L.A. market, particularly the Santa Monica community dubbed Silicon Beach, has evolved in recent years and now boasts a wealth of talented, ambitious entrepreneurs.
“That’s helping to create a really good environment for venture investing,” he said. “There’s an interesting ecosystem being built.”
Local companies secured 87 venture investments through the first six months of the year, a 19 percent increase over the same period last year. The investment total was $791 million, up 33 percent.
The strong local quarter bucked national trends. According to Dow Jones data, U.S. venture capital deals through the first six months fell 5 percent from last year and the dollars invested declined 7 percent.
Equity Activity
Private-equity investment in Los Angeles has been choppy since the economic downturn. However, there were several noteworthy deals recently.
Brentwood Associates and Marlin Equity Partners each announced deals this month, while Oaktree Capital Group LLC unloaded a major holding.
Brentwood, headquartered in West Los Angeles, took a majority stake in Sundance Holdings Group LLC, a Salt Lake City-based direct marketer and retailer founded by Robert Redford and affiliated with the Sundance Channel. Terms were not disclosed.
Marlin, based in Hermosa Beach, said last week that it had acquired Solvport, an ATM services company in Plymouth, Mich. Terms were not disclosed.
Oaktree, the downtown L.A. investment giant, has unloaded a large stake in Nordenia International more than six years after it bought the Greven, Germany, packaging firm.
Oaktree and minority partners sold 93 percent of Nordenia this month to Mondi Ltd. of Johannesburg, South Africa, in a cash-and-debt deal valued at $782 million. Oaktree acquired Nordenia, which specializes in flexible packaging for consumer products, in early 2006 for an undisclosed sum.
Headquarters Sold
Could beleaguered lender Broadway Federal Bank be moving its headquarters?
The 66-year-old thrift said in a regulatory filing last week that it recently sold its headquarters, at 4800 Wilshire Blvd. just east of the Miracle Mile, to the Lebanese American Foundation, a local non-profit, for $4.5 million. Broadway said it signed an agreement to continue leasing space for a six-month term, but it is unclear whether the institution intends to stay in the space beyond six months.
Neither bank officials nor the foundation could be reached for comment.
Broadway, which had been a significant lender to churches, has been struggling with loan losses for several years, receiving a cease-and-desist notice from regulators in 2010. To cut costs, it closed two branches last year.
C-Suite News
Farmers & Merchants Bank of Long Beach announced that it has hired Phillip Bond as chief credit officer. … East West Bancorp Inc., the Pasadena holding company for East West Bank, announced that Tak-Chuen Clarence Kwan was appointed to the boards of the company and the bank. … Broadway has hired Sandy Bellefeuille as chief loan officer. … OpenGate Capital LLC, a private-equity firm headquartered in Century City, appointed Joshua Adams and Alanna Chaffin senior vice presidents. … Oaktree announced that Marna Whittington was appointed to its board. … L&S Advisors Inc., a registered investment adviser in West Los Angeles, has hired Jonathan Drubner as associate director. … Boston Private Bank & Trust Co., headquartered in Boston, has hired W. Scott Sanford and Richard Aguiar as vice presidents in the L.A. office. … First Beverage Group, a West L.A. financial services firm focused on the beverage industry, has appointed James Bareuther to its board.
Staff reporter Richard Clough can be reached at [email protected] or (323) 549-5225, ext. 251.
