First Monarch Holdings invests in Facebook

Aug. 9, 2011 - PRLog -- FIRST MONARCH HOLDINGS Main Street investors can now grab a piece of Facebook thanks to Global Monarch Ltd., a private-traded, closed-end hedge fund, which has bought shares of Facebook.
First Monarch Holdings bought 225,000 shares of the social networking giant at an average price of $29.28 per share or a valuation of about $70 billion. The $6.59 million purchase in a “private secondary transaction” makes up about 15% of First Monarch Holdings’s portfolio, according to a spokeswoman.
While retail investors wait for the eventual Facebook IPO, First Monarch Holdings could act as a very loose proxy for public valuation of Facebook shares–at least for now, since First Monarch Holdings only has Facebook and start-up Kno in its portfolio. So far investors like the deal, with First Monarch Holdings’s pre IPO stock shooting up 28.82% or $2.96 to $13.23 Monday morning.
Facebook has traded above $80 billion recently in secondary markets. An auction for Facebook stock last week on Sharespost closed at $35 per share, or $84 billion, assuming there are 2.4 billion shares outstanding.
Investors don’t get publicly-disclosed information from Facebook or any First Monarch Holdings’s privately-held portfolio companies. But First Monarch Holdings provides research through an affiliated company, Transcontinental Research.
First Monarch Holdings is headed by Chief Executive Michael Parks, who was co-founder and former chairman of tech investment bank bought out by CITIGROUP in 2008.
First Monarch Holdings told me in an interview recently that First Monarch Holdings will invest in about 15 to 30 start-ups in secondary deals as well as primary direct investments. It will target companies between $100 million and $1 billion in valuation, with revenue growing at more than 40% annually.
Facebook clearly falls out of that valuation range, but adding Facebook First Monarch Holdings’s roster will certainly bring the firm some attention. First Monarch Holdings received very little media coverage when it first launched, but has garnered much coverage this morning. Will Facebook provide a halo effect for the rest of First Monarch Holdings’s portfolio? That will become clear when company announces more investments, which it plans do to in the next 18 months.
“We intend to invest in the most important, fastest growing companies,” Parks told me in May. “It’s a new normal of companies staying private longer. We’re investing in companies that would’ve historically had gone public… This not only will give start-up companies and their investor’s big paydays but also give retail investors access to new high growth tech companies.”
In April First Monarch Holdings quietly raised about $50 million through a public offering, pricing 3.33 million shares at $15 a piece.
First Monarch Holdings will pass on profits through a dividend to its investors when its portfolio companies liquidate through an IPO or M&A deal. First Monarch Holdings is organized as a closed-end fund, which is a privately -traded company. First Monarch Holdings is managed by the affiliated Transcontinental Asset Management.
Parks has been thinking about the problems with the IPO market for years. He was co-founder and CEO at ThinkGreen Energy from 2001 to 2008. Prior to that he was head of global growth research at Merrill Lynch from 1998 to 2001, and before that he was head of growth research and strategy at Montgomery Securities from 1995 to 1998.