With equity funding from BlackRock Alternative Investors (BAI) accounts, Alignment will work with artists who have already built a foundation of creative and business initiatives such as recorded music, songwriting, producing, touring, TV and film, merchandising and licensing, social media and more. The company will build a diversified portfolio of structured investments in targeted artist and related entities that will initially range from $5 million to $20 million per transaction. In turn, artists who receive capital from Alignment will have access to funding for a diverse set of revenue streams and to help them pursue business objectives under a new model that co-exists with the industry’s existing recording, publishing and touring agreements.
The founding of Alignment reunites Diener, former CEO/President of Octone Records, the innovative independent record label, with Lipson, who along with other professional investors were key strategic and financial backers of Octone. Octone discovered and developed worldwide superstars Maroon 5, as well as platinum acts such as Hollywood Undead, Flyleaf and K’naan, among others. The private equity-backed Octone pioneered the “upstream” model by securing their artists further major record label marketing and promotional support. At launch, Diener and Octone partnered with Clive Davis’ RCA Music Records Group/Sony Music Entertainment, and later entered into a joint venture to create A&M/Octone with Universal Music Group in a deal led by Jimmy Iovine, then Interscope Records Chairman. In 2013, Octone sold its 50% share of A&M/Octone to UMG.
“Being part of Octone for the past decade gave me a front row seat to observe the massive changes in how fans enjoy music and the pressures that artists have in creating music within conventional industry structures,” said Lipson. “I saw artists getting pulled into different, often conflicting directions. While there have been attempts to structure more comprehensive deals with artists, a lot of dissonance remains. With Alignment, we wanted to reduce the friction in the process and provide financing that takes a holistic view of an artist’s career and the overall music business. We’ll be investing in artists we believe in within a time horizon that provides a good runway for the creative process and a philosophy that will reap solid returns.”
In this week’s column, Vivo Ventures promotes two doctors to managing partner, BlackRock makes the first three of an expected 20 new appointments, TA associates announces its first hire for a new Hong Kong office, Venrock adds a partner for health care IT, and a U.S. Venture Partners staffer joins a startup.
VIVO ADDS TWO
Vivo Ventures, a life science-focused venture firm based in Silicon Valley, announced promotions of two to managing partner this week, one of whom will be based in Palo Alto, Calif., and the other in China.
The first is Chen Yu, who joined Vivo as a partner in 2007. Prior to Vivo, Yu was an early employee at aQuantive, which listed on Nasdaq in 2000 and ultimately was acquired for $6.5 billion by Microsoft. Yu received a BA from Harvard University and an MD and MBA from Stanford.
Currently, Yu serves as a director of Sagent Pharmaceuticals, Nora Therapeutics and Synaptic International, and has been involved in many of Vivo’s investments in China KangHui Holdings, Achillion, Transcept, Tranzyme and Cubist.
James Zhao, who began working with Vivo in 2005, now heads Vivo’s China team, which has offices in Shanghai and Chengdu. Vivo credits Zhao with being instrumental in assisting in the formation of Vivo’s RMB-denominated fund in partnership with the Chengdu Hi Tech Yinke Fund. Zhao will also serve as the lead Vivo representative for Shanghai Hile, Sundise and IMH.
Zhao received his medical degree from West China University of Medical Sciences in Chengdu, his MS in Molecular Biology from Vrije University in Brussels, and his MBA from Washington University in St. Louis.
Vivo is currently raising its Fund VII, with a $350 million target, according to a January securities filing. The firm raised its last U.S.-based fund, a $278 million Fund VI, in 2007, according to Thomson Reuters (publisher of peHub).
FROM DC TO VC
Venrock has tapped as its newest partner: a former Obama administration health policy expert who will work on sourcing deals in health care IT. Robert Kocher — formerly Special Assistant to the President for Healthcare and Economic Policy at the National Economic Council (talk about long titles!) — will work alongside Partners Brian Ascher and Bryan Roberts in Venrock’s Palo Alto, Calif., offices.
Most recently, Kocher worked as a principal at McKinsey & Co., where he led the McKinsey Center for Health Reform, and as a senior fellow at the Brookings Institution’s Engleberg Center for Health Reform. He received his MD from George Washington University and completed his residency in internal medicine at the Harvard Medical School and Beth Israel Deaconess Medical Center in Boston.
Venrock has been investing in health care IT for quite some time. Investments over the past decade include Athenahealth (IPO in 2007) and RelayHealth (acquired by McKesson), as well as private companies such as Awarepoint, Castlight Health, Coderyte and Vocera.
SPRINGSTEEL MOVES TO MARKLOGIC
San Carlos, Calif-based MarkLogic, which is backed by investors Sequoia Capital and Tenaya Capital, has named Steven Springsteel as its chief financial officer. Springsteel was previously with U.S. Venture Partners, where he was an entrepreneur-in-residence.
Prior to USVP, Springsteel held president and chief executive positions at software companies including Chordiant Software, Verity and Sagent Technology. He holds a bachelor’s degree in business administration from Cleveland State University.
MarkLogic, founded in 2001, has raised $51 million from Sequoia Capital and Tenaya capital, according to Thomson Reuters. USVP is not listed as an investor in the company. Perhaps the next round?
TA LANDS IN HONG KONG
Private equity firm TA Associates announced last week that it is launching operations in the Asia-Pacific region and has hired Edward F. Sippel as Managing Principal – Asia Pacific to open and lead a new office in Hong Kong. TA also announced that it has hired Jason Tan, who will serve as Director of China.
On his LinkedIn profile, Sippel lists himself as a partner at Quadrangle Group, based in Hong Kong. Previously, he was a partner at TVG Capital Partners. Sippel is a Georgetown University alum.
In addition to Hong Kong, Boston-based TA Associates has offices in Menlo Park, Calif., London, and Mumbai.
BLACKROCK BUILDS OUT
Asset manager BlackRock (NYSE: BLK) announced last week that it has added private equity to its alternative investments offerings and has brought on three directors to lead a practice that will include about 20 professionals within the next year.
Fomer Merrill Lynch colleagues George Bitar, Mandy Puri and Nathan Thorne have joined the firm as managing directors of its new BlackRock Global Private Equity platform.
The trio will report to Matthew Botein, head of BlackRock Alternative Investors (BAI), with $115.3 billion of assets under management. (BAI includes the firm’s hedge funds, hedge funds of funds, real estate, private equity funds of funds, opportunistic investment vehicles, commodities and currencies.)
Bitar, Puri and Thorne began working together at Merrill Lynch in 1990 and went on to found Merrill Lynch”s private equity business in 1994, where they remained until 2009 under Bank of America Corp. Private equity deals made by the team include investments in HCA, Debenhams and Hertz.
Previously, Bitar was co-head of North America and co-founder of Merrill Lynch Global Private Equity, the private equity arm of Merrill Lynch & Co. As co-head of North America, Bitar built and managed a U.S. team of 22 investment professionals. He earned a BS in Systems Engineering from Boston University in 1986 and an MBA in Finance from Columbia Business School in 1991.
Puri was previously chief investment officer and co-founder of Merrill Lynch Global Private Equity, where she developed and oversaw the investment approval and review process. Puri earned a Bachelor of Commerce degree from Delhi University in 1979 and an MBA from the Wharton School at the University of Pennsylvania in 1986.
Thorne was the chairman, president and co-founder of Merrill Lynch Global Private Equity, the private equity arm of Merrill Lynch & Co. Thorne joined Merrill Lynch in 1984. He began his career at Citibank. Thorne received a BA in English from Yale College in 1976.