No Sand Between Our Toes III

This is the third edition of our very mixed feelings announcement that weve had too little time at the beach. No Marthas Vineyard sojourns for us or visits to Maine to test Lobster Roll recipes at various roadside pools and stands (I am partial to Reds Eats in Wiscasset Maine - the meat of at least a whole one pound lobster with drawn butter or mayonnaise on the side). Weve sold one company this past month to a public entity (announcement below), planning an Initial Public Offering exit from another company, running yet another PE fund, completed a major New Market Tax Credit deal in New Orleans (announcement also below), and led a record number of Market and Technology Diligence engagements. As active as we have been as General Partners and Advisors - we know our client and portfolio CEOs and staff have been unusually busy this summer. More interestingly, we have seen an even more startling circumstance. The engagement, meaning active participation, of Boards of Directors has simply exploded. We have had more new gigs initiated by Boards than at any time in our ten year history of providing diligence and PE Fund services. This extends even to PE and VC Advisory Boards. The latter is the most surprising as the gaggle of institutional investors who lead and monitor PE investments have historically been a decidedly inactive and non-involved group when it comes to direct portfolio operations. Both Boards and Advisory committees are more frequently establishing direct contact with advisors deliberately not through company or fund management. They are increasingly directing management to conduct critical independent reviews of markets and other operational interest and even engaging with service providers and advisors directly. These Board and Advisory members are careful to explain that it is not being done because of a lack of confidence in or out of disrespect to management but rather to have direct influence on and independent knowledge about major decisions. Our lawyer friends also tell us legal inoculation from downside risk factors and shareholder liability is a deliberate justification for use of this Director level type of mitigation tool. One D&O insurer has told us directly that they are negotiating lower rate increases to entities that regularly commit to such activity by Boards. Sofor whatever reason, or even rationalization, Board Directors and Fund Advisory Board members seem to be joining us hard at work in this endless extended summer we are not enjoying - except for the economic pleasure of being very busy. Ill guess that lobster roll will taste even better in September sans crowds and traffic up scenic old Route 1. See two of our most recent announcements of deals that keep us off the beach.

FIS Acquires Compliance Coach

FIS (NYSE:FIS), one of the worlds largest providers of banking and payments technology announced that it has acquired Compliance Coach, Inc., a San Diego based company that provides risk assessment software, e-learning and additional tools to enable compliance with applicable laws and regulations. The acquisition is a strategic move by FIS to enhance its overall compliance strategy. Compliance Coachs largest shareholder was the WBCW Capital Fund, L.P. Semaphore is the General Partner of the fund. FIS assume ownership of Compliance Coachs flagship products that include Regulatory University, Compliance Risk Indicator (CRI) and Compliance Pal. (www.compliancecoach.com and www.fisglobal.com )

P/CDE Funds Historic New Orleans Hotel Deal

Pacesetter CDE, Inc.(PCDE), based in Dallas, has finalized a substantial renovation project as PCDE, National Trust Community Investment Corporation, investment partner Morgan Stanley, along with First NBC Banks' commercial lending group, closed a nearly $20 million New Markets Tax Credit (NMTC) and Historic Tax Credit (HTC) transaction to assist with financing the renovation of the historic Audubon building in New Orleans, LA. The Audubon Building is an eight-story masonry building constructed in 1909 and formerly used as an office building. The building will be repurposed as a 166 room Aloft branded hotel. The property is within the boundaries of the Canal and Burgundy district of New Orleans and is on the edge of the French Quarter. The hotel is expected to provide over 100 FTE construction and permanent jobs as work is completed and business operations begin. PCDE's investment of tax credits gives a critical economic boost to the local community in New Orleans, an area still recovering from Hurricane Katrina in 2005.

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (www.sema4usa.com), a leading global professional services provider of Private Equity funds-under-management and technology diligence services. Semaphore currently holds fiduciary obligations as General Partner for seven Private Equity and Venture Capital funds, a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphores corporate offices are in Boston with principal offices in New York and London.