SAN FRANCISCO – GE Equity, the private equity subsidiary of GE Capital, in April plans to open an office in San Francisco to expand its presence as a direct investor in venture-stage technology and media companies.
The new office has been given the mandate to invest approximately $162 million in non-control deals, representing about 25% of the $650 million the firm committed to private equity investments across all industries for 1999, said a source at the firm.
Technology investments out of the San Francisco office will fall in the data networking and telecommunications areas, with less emphasis on software deals. Media investments will concentrate on new media providers affiliated with NBC’s services on the Internet and elsewhere.
The opening of a California office comes in response to the difficulties East Coast-based firms have encountered trying to participate in good technology deals on the West Coast. The office will operate as a satellite for the first two years, at which time a decision will be made whether to make it a primary arm of the investment group or have it remain as it is. Senior Vice President Tony Pantuso and Vice President Scott Case will run the office, which will be staffed with between four and six investment professionals.
While the bulk of investments by GE Equity will continue to be in the $5 million to $10 million range, the goal of opening the office is to land a few more elephant-sized deals of $30 million or more. The first investment should close by the end of April, the source said.
GE Equity always has been active in private equity as a limited partner, but the group has received increased pressure in the past few years from within GE Capital Corp. to reduce its L.P. activities in favor of direct investments, the source said.
GE Equity announced its name change from GE Capital Equity Capital Group in early March.