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OffRoad Capital Eyes Global Opportunities
Kathleen Willcox
Investment Management Weekly

October 30, 2000
Copyright 2000 Securities Data Publishing

OffRoad Capital Corp., San Francisco, recently announced its intention to expand internationally by joining forces with the Partners Group, Zug, Switzerland, and Samjong Consulting, Seoul, Korea. Other partnerships will materialize in the near future, a spokesperson for the company said.

OffRoad's ultimate vision is to build a global private securities market through the Internet and strategic partnerships, said Stephen Pelletier, the chairman and CEO of OffRoad, at a company-sponsored conference on Sept. 24 in New York.

Pelletier believes that the private securities market holds many more opportunities for institutional investors. According to data gathered by OffRoad, the market has already been partially tapped and private equity fervor has started due to favorable market conditions. Also, unlike the public market in the United States, the private securities market is relatively unregulated, allowing for more freedom and innovation, Pelletier said.

Over the past three years, pension and endowment funds increased their combined allocation to private equity by 93%. And 63.7% of defined benefit pension funds with $3 billion plus predict that venture capital and general private equity will be the most attractive investment type over the next three years, OffRoad's data shows.

The agreements OffRoad made with the Partners Group will extend its marketplace into Germany and Switzerland; the Samjong venture will allow OffRoad to expand into Korea's marketplace. OffRoad's plan is to create regionally based marketplaces where investors can gain access to private securities markets outside of their region.

The management team at OffRoad, the Partners Group and Samjong said that they see a myriad of possibilities in linking private capital markets worldwide.

"The [private securities] market is the mother of all securities markets," Pelletier said. "Everything has been done in a very nineteenth century way until now, and here we are in the twenty-first century."

The private sector is a dynamic high-growth market with unmet needs, according to John Forlines III, the co-president of OffRoad. So far, it has been fragmented and poorly inter-mediated. The Internet and OffRoad changes this, he said.

OffRoad chose the Partners Group and Samjong not only based on their track record and reputation, but because the private securities market is relatively unregulated in Germany, Switzerland and Korea.

In Germany, the private equity market has outperformed the public market by far, said Marcel Erni, the chairman and head of strategic development at the Partners Group. Since the Asian marketplace has opened up, private investing, and investing online will go through the roof, said Young-Gak Yun, president and CEO of Samjong. Studies have estimated that there will be 40,000 venture companies in Korea alone by 2005, he added.

In 1999, OffRoad offered the first private securities to be marketed, priced and sold over the internet, giving institutions and individuals without connections on Wall Street the ability to dive into the market via the Web, a spokesperson said.