Message from David Wilhelm

Dear Friends:

Many of you have seen the article about me in the Chicago Sun-Times on August 11 [see the excerpt below], as well as the subsequent follow-up stories in various publications.  The stories generally try to place me and the venture capital fund of which I am the founder and partner somewhere towards the middle of the on-going federal investigation of wrongdoing by a trustee at the Teachers Retirement System.

Nothing could be further from the truth.  So I am sending this missive out to provide my friends with some facts should this issue come up in conversations you might have with colleagues, friends, family or the media.

Actually, the original story—read in its entirety—provides some context to Hopewell Ventures’ interaction with the Teachers Retirement System.

Unfortunately, several key facts may be lost amid the innuendo.  Unlike the parties who are actually at the center of this investigation, Hopewell hired no consultants or placement agents and paid no fees to anyone to secure any of our investments.  We have not been accused of any wrongdoing of any kind and have not been contacted by anyone in the U.S. Attorney’s office about anything whatsoever.

All I did was make personal financial sacrifices (such as taking a second mortgage on my house to finance our development), build a great team of experienced investors with a great track record and successfully launch a fund to bring desperately needed venture capital to Illinois.

Here are some facts to consider:

1)  Hopewell Ventures was created to help fill a very real capital gap in Illinois and the Midwest—a lack of investment in promising new businesses with high growth potential that costs states like Illinois dearly…in terms of lost jobs—especially good, high-paying jobs--lost revenue, lost wealth creation, lost economic growth.

2)  In our first year of operation, Hopewell Ventures emerged as the leading Illinois-based investor in Illinois-based businesses.

3)  The team at Hopewell Ventures consists of seasoned, professional investors (led by Bill Sutter, formerly of Mesirow Financial, one of the most accomplished private equity investors in the Midwest) with more than 80 years of venture capital investing under its belt—and a combined realized rate of return on that investing in excess of 20 percent a year.

4)  Hopewell Ventures builds on our experience in developing and managing Adena Ventures, a venture capital fund that focuses on high-growth opportunities in central Appalachia.  While other venture investors insist you can’t find worthwhile investments away from the coasts, our teams are proving that you can find great companies in places like Nelsonville, Ohio and Westchester, Illinois.

5)  When it comes to the venture capital business, I am not some Johnny-come-lately; I am not a placement agent; I am not cashing in.  I am the founder of two successful venture capital funds that I helped build from scratch (with the assistance of a second mortgage on our home), where I built the teams, where I instilled the sense of mission, where I played a key role in the development of the investment strategy, and where I continue to play a key role in day-to-day operations.

6)  Hopewell Ventures has received allocations from 13 separate institutional investors including five public Illinois Pension Funds (including the Illinois State Board of Investments), two national banks, two Taft-Hartley union funds, a University Endowment, a Fund of Funds consisting of four other public pension funds and George Bush’s U.S. Small Business Administration.

7)  Our single largest investor is the U.S. Small Business Administration under its Small Business Investment Company program—a designation we received in September 2004 after a rigorous two-year review process (and with the support of Bush administration appointees, individuals hardly inclined to try to do me a favor).

8)  Hopewell’s approval for an investment from the Illinois State Board of Investments came in September 2002, when George Ryan was still governor.

9)  The TRS investment was made following extensive due diligence including a rather detailed 40-page questionnaire, thorough probing of the track records of the Hopewell partners and a presentation to the full board. Our champions were the teachers’ union representatives on the board—they were particularly supportive of our commitment to Illinois.

Their staff was also familiar with the strong track record of Bill Sutter, our managing partner, with whom they had worked.

10)  The TRS investment in Hopewell was contingent upon the federal government’s approval of an SBIC license for Hopewell—providing a second layer, if you will, of due diligence.  The TRS investment’s total allocation of $10 million is less than 10% of our total fund.

11)  When TRS approved its investment in Hopewell, no Blagojevich appointees were on their board. We did not use a consultant/placement agent with TRS or any of our investors and paid no fees to anyone to secure their investment.

12)  The federal subpoena that is the subject of the Sun-Times story is not directed at me or Hopewell Ventures.  We have not received a subpoena or any communication of any kind from the U.S. Attorney’s office. The recipient of the subpoena at issue is the Teachers Retirement System. Our understanding is that they have been asked to hand over material related to their investments in several funds (between 6 and 10 according to the Tribune). The U.S. Attorney’s office may very well be looking into all recent private equity allocations made by the TRS. Again, we simply don’t know; in fact, we were first apprised that Hopewell may be among the companies listed on the subpoena by the Sun-Times reporters.  In short, it was news to us.

Friends, we’ve worked very hard to build a great team with a great mission and look forward to continuing to bring much needed investment dollars to Illinois, the Midwest and Appalachia.  Thanks for your continued support.


Chicago Sun-Times

Feds probe gov aide's pension role

August 11, 2005


A company founded by Gov. Blagojevich's former campaign chief emerged Wednesday as the latest investment firm to draw the attention of federal investigators probing corruption in the state's teacher pension system.

Hopewell Ventures, whose five principals include former top Blagojevich adviser and 1992 Clinton campaign manager David Wilhelm, secured a $10 million investment from the state Teachers' Retirement System in December 2003.

Hopewell netted the TRS investment despite Blagojevich's campaign pledge to end "business as usual" in state government and his promise to prevent some members of his inner circle from doing business with the state.

Neither Hopewell nor Wilhelm has been implicated in any wrongdoing or contacted by authorities. Wilhelm told the Chicago Sun-Times on Wednesday that anyone scrutinizing his company will find that "we're good guys and honest players in a tough business."…

[Um, so WHY EVEN MENTION THEM, Sun-Times?—Caro]

Posted by Carolyn Kay