Upcoming Events
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| Bakersfield Venture Conference
March 2009
Bakersfield, CA | |
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| 3rd Annual Central Valley Venture Forum held in Clovis
by: Brad Triebsch |
On October 17, 2008, The Central Valley Fund, Fresno State University, and the Fresno Business Council co-hosted the 3rd Annual Central Valley Venture Conference at the Rex Phebus Veterans' Memorial Building in Clovis. The event drew approximately 300 people, with conference attendees able to attend a wide variety of panel discussions led by Central Valley CEOs, private equity executives, and investment banking professionals. The event was headlined by Bob Grady, Managing Director for the Carlyle Group, a prominent private equity firm managing $89B in assets, and Lieutenant Governor John Garamendi.
Mr. Grady, a former head of the National Venture Capital Association, discussed how venture capital can transform regional economies like the Central Valley. He likened the Central Valley to Bozeman, Montana, an area that 20 years ago had relatively little in the way of growth-oriented companies or business resources. Today, Bozeman is home to more than 100 technology companies. Mr. Grady went on to add that he felt Fresno, with ten times the population of Bozeman, an active incubator, and access to Fresno State's award winning Lyle Center for Entrepreneurship, had the tools in place to help transform the region. |
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Lieutenant Governor Garmendi spoke about the downturn in the economy and the role state government can play in assisting in the region's economic recovery. Mr. Garamendi commented that although he believes the region's public and private colleges are doing a good job, Central Valley economic indicators will continue to lag other areas until more attention is paid to enhancing the area's vocational education programs.
Panel discussions included an update on the Central Valley economy by Lon Hatamiya, an economist and the former CA Secretary of Commerce, and Tony Olivera, an economist and the current Chairman of the CalPERS Finance Committee. Both economists felt that the economic downturn in the Central Valley would be pronounced due to the housing slump. However, they went on to add that there were several bright spots, such as agriculture, in the Central Valley economy that could generate above market returns over the next 5-10 years.
In the afternoon, companies based in the Central Valley seeking to raise capital were advised by a panel of private equity and investment banking experts on topics ranging from when to hire an investment banker to what specific criteria private equity shops utilize when analyzing a potential investment. Panel moderator and Central Valley Fund partner Ed McNulty, commenting on Central Valley investment opportunities in light of the economic downturn, stated, "Basic industry economies like the Central Valley are becoming more and more attractive as investors focus less on generating exorbitant returns and more on investing in understandable companies with solid fundamentals."
Rounding out the day, an all-star panel of young Central Valley CEOs, including Stuart Woolf (Woolf Enterprises), Will Lyles (Lyles Construction Group), Craig Fourchy (Ultra Gro), Bryce Ruiz (Ruiz Foods) and Bill Barcus (Sebastian Entreprises) spoke to the audience about what it takes to build world class companies in the Central Valley. Most felt that being located in the Central Valley is of strategic long-term value, and all found the Central Valley to be business-friendly overall. The afternoon concluded with a Regional Business Showcase, in which six emerging Central Valley companies presented their investment opportunity to a panel of private equity and venture capital executives. The Best of Show winner was Cottonwood Creek of Fresno, which has developed an innovative solution to dispose of food processing waste water. The winners from the last two years have each received funding as a direct result of their participation in the conference.
Sponsors for this year's conference included Wells Fargo, Central Valley Community Bank, Bank of the Sierra, United Security Bank, Lance Kashian and Co., Walter Wilhelm Law Group, US Bank, Key Bank, and Hamilton Lane. Thank you to all the sponsors and participants for making the 3rd Annual Central Valley Venture Conference a successful event. |
| Sacramento Valley: Challenges & Opportunities in 2009
by: Jose Blanco |
The Sacramento Valley has a population of roughly 2.8M people. 2.2M live in the five-county Sacramento MSA - El Dorado, Placer, Yolo, Sutter and Sacramento. The remaining 600,000 residents are spread over the Valley's six other counties (Yuba, Butte, Colusa, Glenn, Shasta, and Tehama).
The Sacramento area's current challenges, which are primarily associated with the residential housing boom and bust, are well-documented. According to the Sacramento Regional Research Institute (SRRI), the job market in the Sacramento Valley, with unemployment currently standing at 7.7%, will continue to sustain losses in demand until at least September 2009. The oversupply of housing in the region, made apparent by the sharp decline in home prices in 2008 of 32.1%, has also translated into the destruction of asset values in other industries (e.g. commercial real estate and manufacturing) that are indirectly tied to the overall health of the residential housing market (Source: California Association of Realtors).
Despite these economic headwinds, the Sacramento Valley is well diversified economically and generally fares slightly better than the Bay Area and Los Angeles during periods of economic downturn because of the preponderance of government-related employment (accounting for ~30% of total employment in the Sacramento MSA). As suggested recently by the UOP Business Forecasting Center, the impact of the recession upon the California state budget deficit may lead to job losses in government-related employment, but such employment has historically been resilient when facing recession-driven factors. This government-related employment helps to support a regional GDP of over $160B, which is equivalent to the combined GDP of the states of Montana and Oregon. In addition, the Upper Valley region, which is dominated by the Chico MSA and Redding MSA (200,000 and 125,000 residents, respectively), has important roots in the agricultural and forestry product industries. These two industries represent in excess of 20% of the economic activity in the Upper Valley region.
Sectors expected to perform well, on a relative basis, in the current economic cycle include:
- Healthcare - The Sacramento MSA is a regional center for health care and research - UC Davis Health System, CHW/Mercy Healthcare Sacramento, and Sutter Medical Center - with over 27,000 employees. Demand for health care is relatively inelastic, and absolute dollar expenditures are expected to grow based on current population demographics.
- Financial Services & Insurance - The Sacramento Valley serves either as a home office or major regional office for large insurance providers such as Health Net, Vision Service Plan, Kaiser Permanente, and Blue Shield of CA. These companies account for over 15,000 jobs in the region. Well-established financial services firms such as Franklin Templeton, Wells Fargo Bank, and Bank of America provide over 10,000 jobs to the region.
- Agriculture - The Sacramento Valley is among the nation's leaders in the production of rice, tomato, stone fruit, and tree nuts. The region's competitiveness is enhanced by having a stable climate, access to water and by being home to one of the world's leading agricultural research universities, University of California, Davis.
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