Article: SBA Nominee Has Poor Showing at Equity Fund

Karen Gordon Mills is on tap to become the next chief of the Small Business Administration, but an investigative news report questions whether she's the right person for the job.

ProPublica, an independent, non-profit newsroom, reports that the private equity fund run by Mills when she was head of Solera Capital has raised about $250 million for its sole fund, much of it from public pensions, "but has made meager payouts to investors thus far."

The giant California pension fund CalPERS has put more than $72 million into Solera, but by the end of June had received just $102,345 in distributions. The Oregon Public Employees Retirement System has invested about $51 million and has gotten back less than $2 million, according to reporter Robin Fields.

Solera, started by Mills and two other women, bought controlling interests in Latina Media Ventures, the publisher of Latina magazine, organic pasta brand Annie's Homegrown, The Little Clinic (a chain of walk-in health clinics), clothing retailer Calypso Christiane Celle and YOLO, an eco-friendly paint manufacturer.

But the fund does not appear to have cashed out of any of them, either through public offerings or sales to other investors.

"Most investors would not be happy with that type of performance," according to a financial expert cited in the article. "Eventually, it's almost all about the cash out."

A spokeswoman for Obama's transition team said Mills, currently president of MMP Group, another private equity firm, would not respond to questions until her confirmation hearing, for which no date has been set. The transition team also declined to comment, either about Mills' work with Solera or more generally about her qualifications to lead the SBA.

By Sharon McLoone |  January 21, 2009; 11:00 AM ET Policymakers
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