Loophole lands firm a big stake
A Durham venture-capital partnership hopes to show banks that good works can be good business — and help them sidestep government rules. In March, SJF Ventures’ third private-equity fund became the first national one to be licensed by the Small Business Administration as an Impact Investment Fund. Part of an Obama administration effort to stimulate entrepreneurship, the certification requires SJF Ventures III LP to invest at least 50% of its money in companies that have a positive impact, such as clean-energy or education businesses or ones based in economically distressed areas, says David Kirkpatrick, managing director and co-founder.
Clean-tech businesses were a focus of SJF’s earlier investments, so it made sense to apply for the SBA license. But it was also a necessity. The Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits financial institutions with consumer deposits from investing in private-equity firms except in special cases — an attempt to reduce conflicts of interest between banks and clients and minimize risk. The Impact Investment Fund grants banks an exemption from that regulation. Citi Community Capital, part of New York-based Citigroup Inc., announced it will be the lead investor, after putting in $15 million. All told, the fund plans to raise $75 million — $30 million more than SJF’s previous two combined.
Kirkpatrick has a long history with clean-tech companies. In the 1980s, he worked as executive director for Durham-based nonprofit Sunshares Inc., which provided curbside recycling in the Triangle and energy-efficiency consulting. After receiving an executive MBA from UNC Chapel Hill and serving as the principal at another Durham company that did consulting for the recycling and environmental industries, he saw an opportunity to invest in those types of companies and in 1999 co-founded SJF, which also has offices in New York and San Francisco. He also started SJF Institute, a Durham-based nonprofit that provides entrepreneurship education and mentoring. He won’t disclose the return rate for SJF’s funds but says, “Our returns are many, many points above the stock market.”
“As a doctor, the first thing you learn is to do no harm. The legislature, if they move forward with this bill, would create massive harm.”
— UNC Health Care System CEO Bill Roper after an N.C. House of Representatives’ committee recommended limiting the system’s growth. Legislators were responding to complaints from Raleigh-based WakeMed Health & Hospitals that UNC’s purchase of rival Rex Healthcare in 2000 has given it an unfair advantage over private hospitals. The proposal isn’t expected to get through the Senate — if it makes it that far.
Triangle companies’ export sales since 2007 that have been supported by the Export-Import Bank of the United States. Established in 1934, the bank provides loans and credit guarantees to businesses that want to reach markets that the private sector deems too risky. Its charter is set to expire at the end of the month unless Congress extends it. It has supported export sales of $1.8 billion for North Carolina companies since 2007.
RALEIGH — A report issued by the N.C. Department of Environment and Natural Resources says hydraulic fracturing — fracking — to access natural gas reserves can be done safely as long as proper protections are in place. The state is believed to have billions of dollars in natural gas deposits beneath parts of Lee, Chatham, Moore and Orange counties.
RALEIGH — Chinese wind-turbine maker China Ming Yang Wind Power Group opened a research-and-development center at Centennial Campus at N.C. State University. The company will hire at least 15 workers by year-end who will research ways to lower the cost of wind turbines.
MORRISVILLE — Cloud-computing software maker Vocus acquired local email and social-media marketer iContact for $169 million. The Beltsville, Md.-based company will let go 65 of about 245 workers at iContact as a result of the acquisition.
RALEIGH — The city announced Dwight Bassett will manage its new Office of Economic Development to recruit businesses. He held a similar post in Chapel Hill.
CARY — Yellow-Pages publisher and marketing-services provider Dex One paid about $70 million to retire $142 million in bank debt. The company aims to eliminate $500 million in debt this year to strengthen its balance sheet.
MORRISVILLE — Medical-technology company Aerocrine will move its North American headquarters here from New Providence, N.J., creating 45 jobs and investing $219,000 within three years. The Swedish company develops products for patients with inflamed airways. Average annual salary will be $69,000, higher than Wake County’s $44,980.
RALEIGH — DARA Biosciences reached an agreement with Charleston, S.C.-based Innocutis Holdings for the commercial rights to sell its drug Bionect on the oncology market to treat patients who develop skin irritations from cancer treatments. The medicine was being sold only in the dermatology market. Terms of the deal were not disclosed.
RESEARCH TRIANGLE PARK — Research Triangle Park-based RTI International named Wayne Holden president and CEO. He previously served as executive vice president of social, statistical and environmental sciences for the research nonprofit.