Silver Lake, the Silicon Valley private-equity firm with about $14 billion under management, has recruited Credit Suisse Group AG (CSGN) banker Bryce Lee to join a fund focused on clean-energy companies.
Lee, Credit Suisse’s head of technology investment banking in the Americas, starts at Silver Lake’s new Kraftwerk fund in June, said Adam Grosser, who is leading the group. The fund is seeking about $1 billion in capital and already has a commitment of about $300 million from George Soros’s Soros Fund Management LLC, according to two people with knowledge of the matter.
Lee joins at least six other dealmakers who will hunt for investments. Unlike Silver Lake’s private equity business, Kraftwerk plans to invest in companies before their initial public offerings, rather than buying companies and turning them around. Last month, Kraftwerk hired Raj Atluru from venture firm Draper Fisher Jurvetson.
“We are building a dedicated team on a global basis that will differentiate us from traditional private equity firms,” said Greg Mondre, a managing director at Menlo Park, California- based Silver Lake, who oversaw the effort’s development. “We will be able to step in where others are unable to understand how to work around complex situations from a tech standpoint.”
Looking Beyond Startups
The Kraftwerk team also includes Cathy Zoi, who worked at the U.S. Department of Energy, and Steffan Tomlinson, former finance chief at Aruba Networks Inc. They’re seeking to invest between $50 million and $200 million in companies in need of capital to expand beyond the startup phase, Grosser said.
Kraftwerk won’t seek control of the companies, another distinction that sets it apart from Silver Lake’s large and mid- cap funds, which may co-invest in Kraftwerk’s deals. Grosser declined to comment on the amount the group is raising.
“We see opportunities beyond wind and solar technology in areas such as the transformation of the lighting market, which is still dominated by highly inefficient technology, and a complete transformation of the electric grid,” Grosser said.
The fund will target companies developing technology that makes energy production more efficient, reduces waste and emissions and overhauls aging infrastructure. In addition to operating out of a Silicon Valley office, Kraftwerk is planning to open an outpost in Shanghai.
Lee helped build Credit Suisse’s investment banking business in Asia. He also was part of the team that advised the Chinese social-networking company Renren Inc. in its $855 million IPO this month.
Lee’s clients include the world’s biggest maker of thin- film solar modules, First Solar Inc. He raised more than $6.7 billion for 22 public and private clean-technology companies over the past six years and executed financings for businesses in China, including the Internet search giant Baidu Inc.
“Bryce has been a great partner of mine for 19 years and we all look forward to continuing to work closely with him on his new endeavor at Silver Lake Kraftwerk,” said David Wah, global head of technology within Credit Suisse’s investment bank.
Grosser, who left venture firm Foundation Capital to head Kraftwerk, focused on providing growth equity to energy and resource companies. Grosser spent 10 years at Menlo Park-based Foundation, where he invested in companies such as EnerNOC Inc. (ENOC), which provides a service that helps reduce electricity demand, and Silver Spring Networks, the maker of networking equipment and software for smart electricity grids. Both companies are also Lee’s clients.
Grosser also sits on the board of communications equipment supplier Calix Inc. (CALX), which sold shares to the public last year.
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