Tanzania: U.S. Energy Investors Set to Pay Dar a Visit

New York — Executives from some leading US energy companies are scheduled to arrive in the country on Wednesday to explore opportunities in power-generation and fuel-supply projects, a State Department official said on Saturday.
The public-private energy trade mission is led by Johnnie Carson, the US assistant secretary of state for African Affairs, and is co-sponsored by the Corporate Council on Africa, a grouping of American businesses with interests in Africa.
The delegation will discuss “specific challenges to the attraction of private investment for energy infrastructure projects,” according to a State Department briefing paper.
A series of talks with Tanzanian government officials is planned for the two-day visit, which is part of a larger trip that begins in Mozambique on February 6 and includes stops in Kenya, Nigeria and Ghana.
“Implementation of large projects is crucial to meeting the two goals of addressing huge African generation capacity needs and providing the lowest per unit cost of electricity possible,” the State Department briefing adds.
“The historical impediments to such private sector involvement include uncertain legal and regulatory regimes, inconsistent support of cost reflective electricity pricing, and insufficient availability of long-term, limited recourse financing from private financial institutions.”
Currently, one of the US-based companies, Symbion, has been contracted by Tanesco to produce power as part of an emergency plan to address electricity shortage in the country.
The company, which bought another controversial firm, Dowans, is producing power from its Ubungo base as well as in Dodoma.

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Back a Lawsuit, Get a Return

An investor-financed suit against Chevron won a judgment of $18.2 billion Lou DeMatteis/Redux

By Paul M. Barrett
The white-wigged sages of British jurisprudence outlawed investing in someone else’s lawsuit for fear that feudal lords would manipulate their subjects’ litigation for profit or mere sport. The 18th century British jurist William Blackstone condemned such investment, known as champerty, for “pervert[ing] the process of law into an engine of oppression.”
Restrictions on champerty faded as the law evolved. In the U.S., the Supreme Court held in the 1960s that civil rights organizations have a constitutional right to invest in other people’s lawsuits that further the advocacy groups’ aims. More recently, many states have loosened rules to allow consumer-finance firms to lend money for legal cases. The companies that have done litigation finance to date have mostly made loans to plaintiffs’ lawyers pursuing slip-and-fall and auto-accident suits, often charging interest rates of 20 percent or higher.
Now litigation finance is moving up the corporate food chain. Larger and more sophisticated investment outfits, such as Burford Group and Juridica Capital Management in the U.K. specialize in making bets on bigger-dollar cases. Parabellum Capital recently opened its doors in New York after being spun off from the legal finance group at investment bank Credit Suisse. “We’re looking at a company’s lawsuit against another company as an asset on the corporate balance sheet that can be monetized in the short run, while we take an interest in, and some of the risk in, the long-run outcome,” says Christopher Bogart, chief executive officer of Burford and a former executive vice-president and general counsel of Time Warner.
Working out of Manhattan offices so new the art is still indicated only by blue tape on bare walls, Bogart runs a $300 million fund that made new commitments to legal cases totaling $35 million in just the last three months of 2011. “Another way of understanding what we do is that we provide corporate finance for assets that traditionally weren’t subject to finance,” he says. “We’re making the litigation marketplace more efficient.” His investors include Invesco UK, Reservoir Capital Group, and Scottish Widows Investment Partnership.
No data exist on how much is invested in ligitation finance. Burford’s analysis of figures gathered by American Lawyer magazine shows that the 200 largest U.S. law firms bill about $33 billion annually related to litigation, Bogart says. That excludes the cost of verdicts and settlements as well as the billings of tens of thousands of smaller law firms.
Litigation finance, which fertilizes lawsuits that otherwise might settle quickly or die altogether, “is poised for growth worldwide,” Cassandra Burke Robertson, associate professor of law at Case Western Reserve, wrote in an article published in November 2011.
While Bogart doesn’t like discussing Burford’s investments for the record, he points to one widely publicized case that concluded in 2010. The firm invested $6 million in a breach-of-contract lawsuit between two Arizona real estate developers. The winner, Gray Development, paid more than $18 million to Burford—a 200 percent return. Gray would not have been able to afford its highly regarded New York law firm, Simpson Thacher & Bartlett, without an infusion of outside capital, Bogart says. A spokesman for Gray did not return a phone message seeking comment.
In another case, Burford provided $4 million in financing in November 2010 that helped keep alive a lawsuit filed against Chevron on behalf of residents of the rain forest in eastern Ecuador who allege large-scale contamination from a predecessor company’s oil drilling. The investment allowed the plaintiffs’ team to augment its legal firepower by hiring Washington-based law firm Patton Boggs, which normally represents large corporations. Burford quickly sold off its stake in the case, eliminating its downside risk while retaining an interest in any winnings. In February 2011, a provincial Ecuadorian court imposed an $18.2 billion judgment on Chevron; an appellate court has upheld that verdict. The oil company has said it will continue to contest the judgment.
The bottom line: Burford Group has raised $300 million to invest in litigation. It put $35 million to work in the last three months of 2011.
Barrett is an assistant managing editor and senior feature writer at Bloomberg Businessweek.
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Intervale Capital Raises $63M for Private Equity Fund – cbl

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Posted January 3, 2012

Charles Cherington

By Bill Murphy
CAMBRIDGE, Mass. – Intervale Capital has raised $63 million, or about 18 percent of a $350 million private equity fund, from seven investors, according to an SEC filing.
Principals named in the filing by the Cambridge-based fund that focuses on investments in energy firms are:
· Managing partner Charles Cherington; and
· Partner Erich Horsley.
The company said it would pay an affiliate up to $2 million from the proceeds towards annual management fee. It also expects to pay a sales commission of up to $157,500.
Currently, Intervale Capital manages a $280 million private equity fund that invests in oilfield service and manufacturing companies. It has investments in 10 companies.
Reg D filing: http://tinyurl.com/6vvzyje
Also, at citybizlist see:
Intervale Capital Signs Office Lease in Cambridge, MA
Intervale Capital Promotes Erich Horsley to Partner
Bios from Intervale Capital site:
Charles Cherington
Managing Partner
Charles co-founded Intervale Capital to build on the success of Cherington Capital, a private equity firm focused on investments in middle market energy companies. Prior to founding Cherington Capital, Charles co-founded a smaller fund which also focused on middle market buyouts. Charles has over fifteen years of private equity experience.
Before launching his first fund, Charles spent several years as a vice president at the Vietnam Fund, a British private equity fund. Charles also worked for CS First Boston in New York and Vietnam.
Charles earned an M.B.A., with honors, from the University of Chicago and a B.A. in History from Wesleyan University.
Erich Horsley
Partner
Erich started his private equity career in 1998, and has focused exclusively on buyouts of middle-market companies. Erich served as a Principal at Watermill Ventures, a private equity group based in Waltham, MA. He also served as a Vice President at a Boston-based private equity firm with $1.4 billion under management. Erich has spent most of his private equity career executing transactions and overseeing growth in industrial and energy-related businesses.
Erich was a Financial Analyst in the Corporate Finance Department of Morgan Stanley in New York and in Frankfurt, Germany from 1994 to 1996.
Erich received his B.A. in Psychology and English, with honors, from Harvard College and his M.B.A. from Harvard Business School.

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