ACCORDING TO the International Monetary Fund (IMF) “World Economic Outlook,” China’s output will surpass that of the United States in 2016 – only five years from now, writes Martin Hutchinson, contributing editor at Money Morning.
But don’t worry. The IMF calculation is based on “purchasing power parity” (PPP), which does not reflect real money. It relies on projecting China’s stellar growth rates five years into the future. And it relies on Chinese official statistics, which are more than a little questionable.
In fact, after the media storm that resulted, the IMF apparently even soft-pedaled its prediction that China would leapfrog the United States in just five years; in a subsequent interview, an IMF spokesman reportedly said that, by non-PPP measures, the US economy “will still be 70% larger by 2016.” A recent World Bank forecast concluded that China could overtake the United States by 2030.
The IMF prediction – and the attention it continues to draw – serves a useful purpose, particularly if it’s given the scrutiny that it deserves.
For global investors with China-based holdings, it reminds us of that country’s long-term potential – and the fact that such potential is always tempered by near-term risk. For the rest of us, it reminds us that China’s ascendance is inevitable – in fact, is already happening – and will be with us for a long time, even if that Asian giant isn’t immediately going to overwhelm the rest of the world.
And for our elected leaders in Washington, the IMF report – false alarm or not – should serve as a wakeup call to attack and address the many problems that threaten this country’s global leadership.
I had some problems with this prediction from the moment it hit the headlines.
Let’s start with the IMF statistics themselves. They measure gross domestic product (GDP) on the basis of “purchasing power parity,” rather than by market exchange rates.
That makes sense if you’re comparing living standards: If you are talking about what the typical China consumer can buy, he or she is about one-sixth as well off as his or her American counterpart, not one-twentieth.
However, the use of the PPP measure makes much less sense when looking at international trade or political power. That’s because individual purchasing power includes such items as haircuts, which are much cheaper in Beijing than in Boston (except, doubtless, at a couple of very overpriced salons in Shanghai or one of the other burgeoning financial centers) and cannot easily be traded internationally.
On the other hand, goods that are traded internationally are subject to global market forces and are generally about the same price everywhere they are sold. In fact, some of those goods may even be cheaper in the United States, since our distribution system is more efficient and our tariffs lower.
That’s also true of large-scale armaments; you will be able to get the People’s Liberation Army (PLA) soldiers to work for much less than their US counterparts, but the cost of a fighter jet or a missile with certain capabilities is pretty much standard around the world.
So even if the IMF’s 2016 forecast was an accurate one, there’s no way that China would be able to project as much military power as the United States, or to distribute as much foreign aid and subsidies to client states.
For at least a decade beyond 2016 – and probably more – China will be a substantial No. 2 … a market that can’t be ignored … but not No. 1.
When you are estimating future growth rates, the farther out you go, the more inaccurate your predictions become: If you were to take China’s current growth rate and project it forward 50 years into the future, the Asian giant would have absorbed the whole of world GDP and be starting work on Mars.
Even a five-year projection – such as the one the IMF put forth – does not allow for the possibility that China will experience an economic hiccup before that period ends. The recent news that China has just fired the head of its $270 billion high-speed rail network for embezzlement, and is now running the trains 30 miles per hour slower than before for safety reasons, indicates that – in a command economy like China’s – much of the apparently soaring output may have been wasted.
My 1990 Economist diary claimed that the centrally planned East Germany was richer than the free-market Britain; as a native Brit who had recently visited East Germany, I can tell you that this wasn’t the case – in fact, it wasn’t even close.
Indeed, when the Berlin Wall came down, we saw the former Comecon (Council for Mutual Economic Assistance) economies lose as much as 60% of their GDP as factories closed because their output was uncompetitive in the free market. Similarly, up to half of China’s GDP may be wasted: Think of all the empty offices and apartment blocks, developed by state-guaranteed companies, all of which are held as assets on the balance sheets of China’s banking system.
Long-term, there’s no question that China has great potential. At the same time, however, I think it very unlikely that China’s economy will make it to 2016 without a major banking crisis, which will knock back its GDP for several years.
The IMF numbers aren’t the only ones that I feel are suspect – so, too, are many of China’s growth statistics. GDP figures are announced immediately after the end of each quarter, which given China’s size and diversity means they must reflect the wishes of the leadership more than any measurement of reality.
Sometimes, of course, the leadership may wish to record lower growth, to show that some monetary or fiscal tightening is working. But I’ll bet that most of the time, the temptation is to “round up,” as opposed to rounding down.
Far too many Western analysts and observers spend most of their time in the major urban centers, where growth has been fastest, and therefore aren’t aware of, don’t get to see, or even purposely ignore, stagnant areas or places where central planning has wasted billions. The prolonged rapture about the Chinese high-speed rail plan by a number of US commentators is one good example of a case in which too many reporters took too many of China’s claims at face value and failed to examine the challenges and problems that were hidden by the hype.
So my guess is that, even now, China’s GDP and growth rates are not as impressive as reported.
The bottom line: China is big, getting bigger, and its growth can’t be ignored – especially given its long-term investment potential. But there are near-term challenges, many of them substantial. If China does not have a major economic trauma, then indeed by 2030 or so it will be close to overtaking the United States. But we have a lot more than five years in which to make the necessary adjustments.
Our leaders should use this as a wakeup call.
Buying Gold?…
Martin Hutchinson, 03 May ’11
Tuesday 17 May 2011
Monday 21 March 2011
Shaw Capital Working Management Tips & Articles: Rimage: A Call To Action By A Shareholder
Mar. 08, 2011 | Filed Under: RIMG
Dear Members of the Board:
As shareholders of Rimage Corporation (RIMG), Schacht Value Investors demands a change in the company’s strategic direction and capital allocation. On behalf of our clients, who beneficially own 65,010 shares of Rimage, we request:
* A renewed focus on core business & organic initiatives.
* An end to the search for acquisition targets.
* A special dividend of at least $100 million, or $10/share.
* Engagement of investment bankers about a sale of Rimage.
* An end to the search for acquisition targets.
* A special dividend of at least $100 million, or $10/share.
* Engagement of investment bankers about a sale of Rimage.
The company’s enormous cash balance, which currently represents 80 percent of the company’s market capitalization, is its largest source of shareholder value. Recent statements and actions by management raise serious concerns about the intentions for this capital. Over the past year, it has become increasingly clear that Rimage’s leadership will primarily use the cash to pursue an “option” that includes acquisitions and a new “content delivery platform”.
We disagree strongly with this direction.
The current market price of Rimage shares implies a value of $140 million. Two components contribute to this value: a profitable core business that generates significant free cash flow, which at the current market price carries a value of under $30 million, and at least $100 million in cash that investors could redirect without affecting the operation and value of that core business. Even if the core business declines, by any measure, its value should far exceed the $30 million currently being assigned.
Why does the market attribute such a paltry valuation to the core business? The market assigns a negative value to the aforementioned “option” that management hopes to pursue. While management may believe that the option represents the best use of company cash, the market correctly assumes that the option will instead destroy shareholder wealth. In fact, CEO Sherman Black reinforced the market’s view only last week:
We have not given any financial estimates, because we don’t have a firm business plan that we can share with you at this time. What we have shared with you, Steve, is that we have an existing business that we feel comfortable is going to continue to generate cash flow.
We could not have said it better ourselves. Everything outside the core business is just an expensive experiment, a speculation with shareholder capital that we do not and will not support.
Focus on the Core Business
The operating portion of Rimage should be the largest component of enterprise value and the focus of management’s efforts. Management may feel “comfortable (that it) is going to continue to generate cash flow”, but the “option” is a major distraction that jeopardizes this progress.
Furthermore, instead of throwing an undefined amount of cash at the promised “content delivery platform,” management should seek further organic growth in areas that truly relate to the existing business. By their own admission, management does not have a firm plan for their new business efforts. These ventures are ill-defined and promise to consume unknown quantities of shareholder capital.
To be clear, we do not oppose investing for the future. Rather we question the nature and extent of the needed investment. The Board of Directors must resist the institutional imperative to spend the enormous store of wealth.
End the Search for Acquisitions
If we were to write a book entitled “Successful Corporate Acquisitions”, it would be a very slim text. The chapter covering technology companies would be slight to non-existent. Sherman Black acknowledged this during the 4th Quarter 2009 earnings conference call:
I can provide you with a lot of data that says companies that do what you just suggested [acquisitions] actually fail. And when you start looking multiple rings away from your core, your chances of success go way down. And that’s been documented in many, many cases. I would rather – if I thought that’s where I was going to go, I’d rather give the money back to the shareholders and let them decide where they want to take their investments.
This remark reassured us as investors, but it has started to ring hollow in light of recent statements and developments. First and foremost, the company hired an investment bank to explore acquisition targets. We are reminded that you never ask a barber if you need a haircut!
Next, the Board of Directors this week changed management incentive compensation so as to actually encourage acquisitions. The company did not discuss or even identify this critical change during the most recent earnings conference call. We thus question the ability of the current Board of Directors to represent investor interests. To encourage behavior that will likely destroy shareholder wealth strikes us as irrational.
For at least a year, investors have questioned management (publicly and privately) about capital allocation plans, particularly in regard to Rimage’s enormous and growing cash balance. Initially, management asked for time to formulate a plan, citing their short time on the job. More recently, it hinted at a plan that remains undisclosed, ill-defined, or both. Nonetheless, management assured shareholders that the cash is not burning a hole in the corporate pocket.
Hiring an investment bank and changing compensation incentives confirms investors’ worst fears. Yet the Board of Directors expects us to sit passively, content with the cash balance in the hands of management, despite signs of imminent value destruction.
Despite the general lack of transparency, one thing is abundantly clear: there are no plans to disgorge excess capital back to shareholders, where it is desired and where it belongs.
Given the checkered history of corporate deal making, this should be the first option considered, not the last.
Shareholder after shareholder has raised the issue of a special dividend. Management has dismissed us every time, with excuses, platitudes, and outright condescension. Just review the enclosed litany of exchanges regarding Rimage’s cash over the last 5 quarters (attached).
Management forgets that investors own this capital. Yet management ignores investor calls for a pro-rata share of our own cash, in favor of management ambitions, unspecified customer requests, a call for growth by the Board of Directors, and whatever gem our new investment bankers may uncover. We should not have to wait at the end of the line for our own capital.
If shareholders needed further evidence of the company’s intentions, we need only cite Sherman Black’s recent statement that accelerating growth at Rimage “will require some inorganic activity, and we’re looking at those options”. Such veiled references to acquisitions only provide further proof that management understands the unpopularity of the “acquisitions first” course.
Declare a Special Dividend
Numerous academic studies and countless examples show clearly that large excess cash balances erode management discipline and shareholder returns. Yet management ambitions often override financial concerns when shareholders fail to intervene. Even Warren Buffetthimself has weighed in on these issues saying he prefers smaller companies with higher returns on capital to bigger ones with lower returns.
Investors will not allow Rimage to become a venture capital fund. Most of Rimage’s shareholders are professional investors with a far greater capability to reinvest this capital, with the track records to prove it. Investors, including Schacht Value, have a wider choice of possible investments outside the company’s rather specific area of technology.
The company could easily return at least $100 million to shareholders and still have more than enough cash for organic opportunities and working capital. Even a distribution of this size would leave some $16m in cash to support $80m-$85m in 2011 sales. Management must demonstrate why they could not operate the current business and invest for the future with this level of remaining cash (post distribution), ongoing free cash flow, and a debt free balance sheet.
We therefore request that the Board declare a special dividend of at least $100 million. This special dividend would be additive to the regular dividend, not a replacement.
Investigate Possible Company Sale
With a low enterprise value multiple, large cash balance, and steady free cash flow capabilities, Rimage makes a natural target, not an acquirer. The only reason to hire an investment banker would be to sell the company. We can’t name a single “minnow-swallows-whale” acquisition that succeeded. Even “bolt-on” acquisitions are a mixed bag in terms of success.
Thus, in the interest of exploring all avenues of shareholder value maximization, we request that the Board of Directors engage an investment bank to solicit offers for Rimage. The best option for shareholders may well be a sale of the company, but we won’t know unless the Board of Directors explores the possibilities.
Further Comments
In anticipation of one response to our request, let us acknowledge the company’s steps to respond to shareholder discontent: engaging in modest share repurchases and declaring a regular dividend. These decisions, however, do not address the huge amount of cash in question or the risky steps being taken elsewhere in the name of growth.
For instance, despite the recently announced buyback activity, shares outstanding have actually increased. Clearly, the benefit of the share repurchases has not accrued to shareholders. Instead, it represents a wealth transfer (via stock options) to employees, making what was implicit explicit. Management only uses the share repurchases to the extent needed to offset option dilution. Whatever the portrayal, this is not a serious effort to return capital to shareholders.
Investors welcome a regular dividend as a necessary step for Rimage, but it does not address the company’s outsized cash balance. Barring any special dividend, cash will likely continue to grow, unless management wastes it on an acquisition.
So when it comes to addressing the cash hoard and/or returning a significant amount of cash to shareholders, the above activities are merely window-dressing.
Conclusion
It is time the Board of Directors upholds its fiduciary duty to protect shareholders from the management team’s ambitions, directing them to run the business at hand. While day-to-day operations may not have the glamour and intrigue of so-called “strategic matters”, Rimage investors believe they are a better use of management’s time, and our money.
Send a clear signal to existing shareholders and the wider investment community that Rimage will not burn its cash in a misguided attempt to discover the next “big thing”. The Board of Directors must consider all options for increasing value, including a sale of the company. In the meantime, the company must return excess cash to its owners.
Leave eager investment bankers and their shopping lists for others. By doing so, you will distinguish Rimage as a true steward of shareholder capital and likely cause a positive reappraisal of the company’s value.
In short, we trust management to run its existing business, not to allocate over $100 million in shareholder capital on new ventures.
Numerous concerned shareholders have patiently tried to work with management to address capital allocation. Our reasonable concerns have fallen on deaf ears. For this reason, we have lost confidence in the company’s intentions and abilities in regard to our capital.
We therefore appeal to the Board of Directors to weigh in. Please fulfill your obligation to protect shareholder value. By considering only acquisitions and token displays of affection for shareholders, directors risk being held accountable by investors for any destruction of shareholder value that results.
Shaw Capital Working Management Tips & Articles: Backed by Castletop Capital, OpenPeak Raises $15.5M – cbl
http://dallas.citybizlist.com/16/2011/3/13/Backed-by-Castletop-Capital-OpenPeak-Raises-15.5M–cbl.aspx
Posted March 13, 2011
By Brian Wolak
AUSTIN — An SEC filing indicates that OpenPeak has raised$15.54 million from a $26 million offering of mixed securities, attracting six investors.
The Boca Raton-based provider of multimedia touch-screen devices and device management platforms secured $52 million in financing last June, as reported by citybizlist. Some of its investors at the time included Intel Capital, Horizon Technology Finance, Velocity Financial Group, and a distribution finance and working capital line from GE Capital’s Commercial Distribution Finance unit.
Principals named in the new filing include:
- Daniel Gittleman, CEO
- Howard Kwon, general counsel
- Andrew Aiello, vice president
- Paul Krzyzanowski, CTO
- Louis Salamone
- Joachim Gfoeller Jr., director, from New York-based GMG Capital Partners
- J. Tomilson Hill, director, from New York-based The Blackstone Group
- Alex Komoroske, director, from Wheaton, Ill.-based Ritchie Capital
- Vincent Pizzica, director, from Burbank, Calif.-based Thomson Inc.
- James Robinson IV, director, from New York-based RRE Ventures
- John Sculley, director, from Boca Raton, Fla.-based Watermark Medical
- Morton Topfer, director, from Austin, Texas-based Castletop Capital
OpenPeak designs and develops end-to-end managed platforms and devices that enable service providers, utilities, applications developers, and content owners to interact with customers in their homes, offices, and while traveling.
The company recently introduced its new 4G-enabled OpenTablet devices that made their debut during the 2011 Mobile World Congress in Barcelona, Spain.
SEC filing: http://tinyurl.com/6gd8ujg
Bios:
Daniel J. Gittleman
Mr. Daniel J. Gittleman is the Founder, Chairman, and Chief Executive Officer of OpenPeak Inc. He founded the firm in early 2002. Mr. Gittleman is also an Advisory Partner at Millennium Technology Ventures and Millennium Technology Value Partners IV, L.P. Previously, he founded RAID Power Services, Inc. in 1995, before repositioning the company in 2000 as StorageApps, Inc. At inception, Mr. Gittleman was responsible for all sales, engineering, and marketing efforts of Raid Power. Under his leadership, the company quickly tripled revenues and margins and became the number two worldwide market leader in storage management software according to Gartner/Dataquest. As the company grew, Mr. Gittleman built and led the research and development team that developed the company’s core SANLink storage virtualization software that accounted for much of the company’s success. He was also responsible for establishing partnership relationships with Dell, Hitachi Data Systems, IBM Corporation, Hewlett-Packard, and others that eventually led to a highly successful acquisition of StorageApps by Hewlett-Packard, in 2001. Mr. Gittleman served as a Venture Partner at GMG Capital Partners L.P., which he joined in 2001. Mr. Gittleman is a frequent industry speaker on subjects ranging from wireless technology to storage and digital media.
Joachim Gfoeller Jr., GMG Capital Partners
Mr. Gfoeller co-founded GMG Capital Partners in 1997 and has served as its Managing General Partner since then. Since 2004, Mr. Norris has been actively involved on the Board of Directors of a number of GMG portfolio companies.
Prior to joining the General Partner, Mr. Gfoeller was one of the founding partners of Stolberg Partners, a New York based $70 million buyout fund established in 1993. At Stolberg Partners, Mr. Gfoeller had extensive experience investing in the private equity market, particularly in the manufacturing and distribution industries. Prior to establishing Stolberg Partners, Mr. Gfoeller served as a vice president of the money management firm Weiss, Peck & Greer (1988-1993) and as a partner of its buyout group (1992-1993).
While at Stolberg Partners and Weiss, Peck & Greer, Mr. Gfoeller was responsible for generating private equity deal flow through his extensive network in the Midwest, the South and the East Coast and was involved in all phases of the private equity investment process from finding investment opportunities, conducting due diligence, making investments to creating exit strategies.
Mr. Gfoeller is a Director or Board advisor to Forum Systems, Lancope and OpenPeak. He also sat on the Board of Directors of Phobos and StorageApps prior to their acquisitions by, respectively, SonicWALL for approximately $270 million and Hewlett-Packard for approximately $350 million.
Mr. Gfoeller holds a B.A., magna cum laude, Phi Beta Kappa, in International Studies from The Ohio State University (1981), a M.A., with honors, Economics/Latin American Studies from The Johns Hopkins School of Advanced International Studies (1983) and an M.B.A., Finance from the Wharton School at The University of Pennsylvania (1988).
J. Tomilson Hill, The Blackstone Group
J. Tomilson Hill is President and Chief Executive Officer of the Funds of Hedge Funds group, a Vice Chairman of Blackstone and a member of the board of directors of our general partner, Blackstone Group Management L.L.C.
Mr. Hill previously served as Co-Head of the Corporate and Mergers and Acquisitions Advisory group before assuming his role in the Funds of Hedge Funds group. In his current capacity, Mr. Hill is responsible for overseeing the day-to-day activities of the group, including investment management, client relationships, marketing, operations and administration. He also serves as a member of Blackstone’s Management and Executive Committees.
Before joining Blackstone in 1993, Mr. Hill began his career at First Boston, later becoming one of the Co-Founders of its Mergers & Acquisitions Department. After running the Mergers & Acquisitions Department at Smith Barney, he joined Lehman Brothers as a partner in 1982, serving as Co-Head and subsequently Head of Investment Banking. Later, he served as Co-Chief Executive Officer of Lehman Brothers and Co-President and Co-COO of Shearson Lehman Brothers Holding Inc.
Mr. Hill is a graduate of Harvard College and the Harvard Business School . He is a member of the Council on Foreign Relations where he chairs the Investment Committee and serves on the Council’s Board of Directors, and is a member of the Board of Directors of Lincoln Center Theater, where he serves as President. Mr. Hill serves as Chairman of the Board of Trustees of the Smithsonian’s Hirshhorn Museum and Sculpture Garden . He is a member of the Board of Directors of OpenPeak Inc.
James Robinson IV, RRE Ventures
Jim Robinson is a Co-Founder & Managing Partner of RRE Ventures. He has been active within the technology community for over twenty-five years as a venture capitalist, entrepreneur and banker.
Since co-founding RRE in late 1994, Jim has been responsible for more than thirty technology investments, with a focus on digital consumer, enterprise and financial services technologies. He is currently a Director of AdaptiveBlue, Betaworks, GoMobo, iCrossing, MixedSignals, m-Via, OpenPeak, Quirky, SmartPay, and Wisdomtree.
While earning a dual degree in Computer Science and Business Administration at Antioch College during the early 1980′s, Jim worked as a programmer for state government. Later he founded and was President of IV Systems, a firm that created small business applications for unix workstations. In 1986, Jim joined JP Morgan & Co., where he spent four years working on technology-related assignments, initially helping build their global risk management systems, and later as an investment banker in corporate finance. Jim earned an MBA from Harvard in 1992, and subsequently joined Hambrecht & Quist Venture Capital in San Francisco . While at H&Q he led investments primarily within the software and communications sectors.
Jim is involved in several non-profit endeavors, and has a particular interest in children’s rights and issues. He is a Director of the New York City Investment Fund (NYCIF), NYC Seed, a member of the National Police Defense Foundation, and a member of the Advisory Board of the National Association on Drug Abuse Problems. Jim has been a member of the Young President’s Organization since 1998.
Morton Topfer, Castletop Capital
Mort is a Co-Founder and Managing Director of Castletop Capital. Before Castletop, Mort was with Dell Inc. 1994 to 2002 where he served as Vice Chairman. Prior to his tenure at Dell, Mort spent 23 years with Motorola, where he held multiple executive positions spanning the full range of Motorola’s global business. Prior to Motorola, Mort spent 11 years at RCA Laboratories in various research and development and management positions, during which time he wrote a book on thick-film electronics. In 1996, Mort was conferred the Darjah Johan Negeri Penang State Award by the Governor of Penang for his contributions to the development of the electronics industry in Malaysia . Mort currently serves as a Director and Chairman of Measurement Specialties, Inc. (MEAS) and also serves as a board member of several private companies including OpenPeak Inc.
Posted March 13, 2011
By Brian Wolak
AUSTIN — An SEC filing indicates that OpenPeak has raised$15.54 million from a $26 million offering of mixed securities, attracting six investors.
The Boca Raton-based provider of multimedia touch-screen devices and device management platforms secured $52 million in financing last June, as reported by citybizlist. Some of its investors at the time included Intel Capital, Horizon Technology Finance, Velocity Financial Group, and a distribution finance and working capital line from GE Capital’s Commercial Distribution Finance unit.
Principals named in the new filing include:
- Daniel Gittleman, CEO
- Howard Kwon, general counsel
- Andrew Aiello, vice president
- Paul Krzyzanowski, CTO
- Louis Salamone
- Joachim Gfoeller Jr., director, from New York-based GMG Capital Partners
- J. Tomilson Hill, director, from New York-based The Blackstone Group
- Alex Komoroske, director, from Wheaton, Ill.-based Ritchie Capital
- Vincent Pizzica, director, from Burbank, Calif.-based Thomson Inc.
- James Robinson IV, director, from New York-based RRE Ventures
- John Sculley, director, from Boca Raton, Fla.-based Watermark Medical
- Morton Topfer, director, from Austin, Texas-based Castletop Capital
OpenPeak designs and develops end-to-end managed platforms and devices that enable service providers, utilities, applications developers, and content owners to interact with customers in their homes, offices, and while traveling.
The company recently introduced its new 4G-enabled OpenTablet devices that made their debut during the 2011 Mobile World Congress in Barcelona, Spain.
SEC filing: http://tinyurl.com/6gd8ujg
Bios:
Daniel J. Gittleman
Mr. Daniel J. Gittleman is the Founder, Chairman, and Chief Executive Officer of OpenPeak Inc. He founded the firm in early 2002. Mr. Gittleman is also an Advisory Partner at Millennium Technology Ventures and Millennium Technology Value Partners IV, L.P. Previously, he founded RAID Power Services, Inc. in 1995, before repositioning the company in 2000 as StorageApps, Inc. At inception, Mr. Gittleman was responsible for all sales, engineering, and marketing efforts of Raid Power. Under his leadership, the company quickly tripled revenues and margins and became the number two worldwide market leader in storage management software according to Gartner/Dataquest. As the company grew, Mr. Gittleman built and led the research and development team that developed the company’s core SANLink storage virtualization software that accounted for much of the company’s success. He was also responsible for establishing partnership relationships with Dell, Hitachi Data Systems, IBM Corporation, Hewlett-Packard, and others that eventually led to a highly successful acquisition of StorageApps by Hewlett-Packard, in 2001. Mr. Gittleman served as a Venture Partner at GMG Capital Partners L.P., which he joined in 2001. Mr. Gittleman is a frequent industry speaker on subjects ranging from wireless technology to storage and digital media.
Joachim Gfoeller Jr., GMG Capital Partners
Mr. Gfoeller co-founded GMG Capital Partners in 1997 and has served as its Managing General Partner since then. Since 2004, Mr. Norris has been actively involved on the Board of Directors of a number of GMG portfolio companies.
Prior to joining the General Partner, Mr. Gfoeller was one of the founding partners of Stolberg Partners, a New York based $70 million buyout fund established in 1993. At Stolberg Partners, Mr. Gfoeller had extensive experience investing in the private equity market, particularly in the manufacturing and distribution industries. Prior to establishing Stolberg Partners, Mr. Gfoeller served as a vice president of the money management firm Weiss, Peck & Greer (1988-1993) and as a partner of its buyout group (1992-1993).
While at Stolberg Partners and Weiss, Peck & Greer, Mr. Gfoeller was responsible for generating private equity deal flow through his extensive network in the Midwest, the South and the East Coast and was involved in all phases of the private equity investment process from finding investment opportunities, conducting due diligence, making investments to creating exit strategies.
Mr. Gfoeller is a Director or Board advisor to Forum Systems, Lancope and OpenPeak. He also sat on the Board of Directors of Phobos and StorageApps prior to their acquisitions by, respectively, SonicWALL for approximately $270 million and Hewlett-Packard for approximately $350 million.
Mr. Gfoeller holds a B.A., magna cum laude, Phi Beta Kappa, in International Studies from The Ohio State University (1981), a M.A., with honors, Economics/Latin American Studies from The Johns Hopkins School of Advanced International Studies (1983) and an M.B.A., Finance from the Wharton School at The University of Pennsylvania (1988).
J. Tomilson Hill, The Blackstone Group
J. Tomilson Hill is President and Chief Executive Officer of the Funds of Hedge Funds group, a Vice Chairman of Blackstone and a member of the board of directors of our general partner, Blackstone Group Management L.L.C.
Mr. Hill previously served as Co-Head of the Corporate and Mergers and Acquisitions Advisory group before assuming his role in the Funds of Hedge Funds group. In his current capacity, Mr. Hill is responsible for overseeing the day-to-day activities of the group, including investment management, client relationships, marketing, operations and administration. He also serves as a member of Blackstone’s Management and Executive Committees.
Before joining Blackstone in 1993, Mr. Hill began his career at First Boston, later becoming one of the Co-Founders of its Mergers & Acquisitions Department. After running the Mergers & Acquisitions Department at Smith Barney, he joined Lehman Brothers as a partner in 1982, serving as Co-Head and subsequently Head of Investment Banking. Later, he served as Co-Chief Executive Officer of Lehman Brothers and Co-President and Co-COO of Shearson Lehman Brothers Holding Inc.
Mr. Hill is a graduate of Harvard College and the Harvard Business School . He is a member of the Council on Foreign Relations where he chairs the Investment Committee and serves on the Council’s Board of Directors, and is a member of the Board of Directors of Lincoln Center Theater, where he serves as President. Mr. Hill serves as Chairman of the Board of Trustees of the Smithsonian’s Hirshhorn Museum and Sculpture Garden . He is a member of the Board of Directors of OpenPeak Inc.
James Robinson IV, RRE Ventures
Jim Robinson is a Co-Founder & Managing Partner of RRE Ventures. He has been active within the technology community for over twenty-five years as a venture capitalist, entrepreneur and banker.
Since co-founding RRE in late 1994, Jim has been responsible for more than thirty technology investments, with a focus on digital consumer, enterprise and financial services technologies. He is currently a Director of AdaptiveBlue, Betaworks, GoMobo, iCrossing, MixedSignals, m-Via, OpenPeak, Quirky, SmartPay, and Wisdomtree.
While earning a dual degree in Computer Science and Business Administration at Antioch College during the early 1980′s, Jim worked as a programmer for state government. Later he founded and was President of IV Systems, a firm that created small business applications for unix workstations. In 1986, Jim joined JP Morgan & Co., where he spent four years working on technology-related assignments, initially helping build their global risk management systems, and later as an investment banker in corporate finance. Jim earned an MBA from Harvard in 1992, and subsequently joined Hambrecht & Quist Venture Capital in San Francisco . While at H&Q he led investments primarily within the software and communications sectors.
Jim is involved in several non-profit endeavors, and has a particular interest in children’s rights and issues. He is a Director of the New York City Investment Fund (NYCIF), NYC Seed, a member of the National Police Defense Foundation, and a member of the Advisory Board of the National Association on Drug Abuse Problems. Jim has been a member of the Young President’s Organization since 1998.
Morton Topfer, Castletop Capital
Mort is a Co-Founder and Managing Director of Castletop Capital. Before Castletop, Mort was with Dell Inc. 1994 to 2002 where he served as Vice Chairman. Prior to his tenure at Dell, Mort spent 23 years with Motorola, where he held multiple executive positions spanning the full range of Motorola’s global business. Prior to Motorola, Mort spent 11 years at RCA Laboratories in various research and development and management positions, during which time he wrote a book on thick-film electronics. In 1996, Mort was conferred the Darjah Johan Negeri Penang State Award by the Governor of Penang for his contributions to the development of the electronics industry in Malaysia . Mort currently serves as a Director and Chairman of Measurement Specialties, Inc. (MEAS) and also serves as a board member of several private companies including OpenPeak Inc.
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