Morgan Stanley and Morgan Stanley Venture Partners Announce
Formation of Independent Venture Capital Firm
New Firm to Be Called Crossmark Capital
May 16 2005 | New York
Morgan Stanley (NYSE: MWD) and the investment
professionals at Morgan Stanley Venture Partners have agreed to establish Morgan
Stanley Venture Partners as an independent venture capital firm. The new firm, to be
called Crossmark Capital, will be led by Dr. William Harding, a 20-year veteran of the
venture capital business. Crossmark Capital will be owned by Dr. Harding and the five
other principals from Venture Partners. Since its inception in 1986, Venture Partners has
raised six funds with over $1.2 billion in aggregate committed capital. The new firm will
continue to have offices in New York City and Menlo Park, California.
Crossmark Capital will manage the Venture Partners' funds through a subadvisory role.
Morgan Stanley will remain the general partner of and retain its limited partner interests
in the Venture Partners funds. Morgan Stanley also will continue to provide support and
services to the funds. The subadvisory relationship is expected to be effective after
closing conditions are met, including receipt of necessary consents and approvals.
"The Venture Partners team has created a highly successful franchise and established
itself as an important player in the venture capital marketplace," said Mitchell Merin,
President and Chief Operating Officer of Morgan Stanley Investment Management.
"Similar to the dynamics of the private equity market when Morgan Stanley Capital
Partners was established as an independent entity, market conditions in venture capital
have evolved. We mutually agreed with the professionals from Venture Partners that the
independent business model is the preferred structure for venture capital firms in today's
environment. The opportunity for venture capital firms is increasing considerably in this market, and we believe that Venture Partners will be best able to expand the business and
prosper as an independent franchise."
"Venture Partners' transition to independence will benefit our investors and portfolio
companies by expanding our universe of prospective investors, enhancing our access to
investment opportunities and enabling us to continue to attract the best talent in the
industry," said Dr. Harding, Managing Director of Morgan Stanley and President of
Morgan Stanley Venture Partners. "Our investors and portfolio companies will continue
to work with the same team from Venture Partners and will continue to benefit from the
same investment strategy that, for the past 19 years, has built significant value. Also, we
will maintain a close working relationship with Morgan Stanley."
Morgan Stanley will operate its other existing principal and real estate investment
vehicles as before and is actively pursuing additional principal investing opportunities for
About Morgan Stanley:
Morgan Stanley is a global financial services firm and a market leader in securities,
investment management and credit services. With more than 600 offices in 28 countries,
Morgan Stanley connects people, ideas and capital to help clients achieve their financial
About Venture Partners:
Venture Partners targets equity investments in expansion/later stage financings, buyouts
and recapitalizations of emerging growth companies in the information technology and
health care industries. Since its founding 19 years ago, Venture Partners has invested
over $1 billion of equity capital in over 150 companies in these industries.
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