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— Movers and Shakers —
Chris Temple's 20-year career in private equity has heretofore emphasized the private. So it's only natural that, on being asked what's different since becoming president of Vulcan Capital, the friendly 41-year-old mentions talking to reporters. The media's interest is understandable. As the investment arm of Paul Allen, Vulcan Capital manages most of the $10.5 billion that the most recent Forbes 400 list attributes to the Microsoft Corp. co-founder. And Temple, as Vulcan Capital's new president, is charged with extending a diversification program that has yet to be widely appreciated. Casual observers can be excused for thinking Vulcan Capital's strategy still consists of major stakes in mediacentric companies. Early investments in Charter Communications Inc., DreamWorks SKG and Oxygen Media LLC may not have been high performers, but they were high profile.
For the past half-decade, however, Vulcan Capital's strategy has been undergoing an overhaul. Today, the so-called family office is as likely to be plugged into financial services, life sciences or natural resources as it is into the "wired world" Allen once pursued to exclusion. And its stealth-like diversification out of media has gone so well that Temple is basically charged with extending it another generation. Lance Conn, who began the diversification program on joining Seattle-based Vulcan Capital as president in 2004, recruited his successor last September. Temple was then a managing director at Tailwind Capital LLC, the New York private equity firm, having previously served in that capacity at Friend Skoler & Co. LLC and Thayer Capital Partners. Temple, with a Harvard M.B.A., began his career at KPMG LLP as a licensed CPA who specialized in energy and natural resources. Temple's devoted much of his time when he first joined Vulcan Capital to learning the nuances of the family office and the contents of its portfolio. "Fund-based capital has a defined life -- a five-year investment period and a five-year harvest period -- whereas we can have indefinite hold periods in assets that are much less liquid," he says. Temple is also aware that, given that the Internal Revenue Service treats the family office as it would an individual, he can do much more tax structuring than he could in traditional private equity. Moreover, just as it has diversified away from media, Vulcan Capital has expanded its direct-investment practice to include indirect placements through fund managers in London, New York and Palo Alto, Calif. "We think we can benefit from others who don't necessarily want to move to Seattle," Temple says. Exhibit A in this regard is Makena Capital Management LLC, a fund fronted by former Stanford University endowment chief Michael McCaffery and seeded with $1.5 billion from Vulcan Capital. One wishes the investments well -- all of them -- for the simple reason that Temple's new gig merits exit strategies of a higher order than his previous ones. "Paul has made it clear that the ultimate disposition will be charity," he says. "So we're building growth not just for his family, but also for his legacy." Comments |
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Vulcan Capital has been a mess for more than half a decade. Lance Conn and his predecessors were totally unqualified as investment professionals, and the results seem to have finally become obvious to Paul Allen. It's rare to see this group make a profitable investment, and even more rare to see a smart investment. Nice going with Charter, for example. $7 billion loss or so. Allen's investment in financial firms are almost certainly in the red, too, following last year's massive market losses. If Paul wants to leave his net worth to charity, he's better off giving it away right now. He would certainly have been better off giving it away 5-10 years ago.