Richard Lloyd

Hilco IP Merchant Banking, the advisory and investment platform formed last year by former Ocean Tomo executive Michael Friedman and ex-Rockstar head John Veschi, has made a key hire from Broadcom as it looks to expand its monetisation expertise into the semiconductor space. The hire is the latest indication that the chip industry is becoming increasingly active in terms of IP value creation.

Sailesh Merchant is joining Hilco’s IP group as chief technology officer for semiconductors after a long career in the sector which has included stints at AT&T Bell Labs and its successor Lucent Technologies, Lucent spin off Agere Systems and LSI (which was merged into Agere in 2007). At Broadcom he was part of the IP licensing group and was a director of the IP reverse engineering team. He’s also the inventor behind 250 worldwide patents including 135 in the US.

At Agere and LSI Merchant worked closely with Veschi who told the IAM blog he was eager to bring him on board at Hilco. “I’ve been trying to reconnect with Sailesh since I left LSI but there was no real basis for him to be part of the team at Rockstar because we didn’t have any technology focused on the semiconductor space,” Veschi said.

Hilco moved aggressively into the IP market when it hired Friedman in early 2016 and then added Veschi and his former Rockstar team from Marquis IP. As well as running an advisory business, the team has committed to raising and investing its own capital alongside other investors as they look for assets to acquire outright, co-invest in or build value creation strategies for.

Friedman is one of the few players in the market who combines a long Wall Street career with significant IP expertise and has worked closely with the likes of Blackberry on monetisation projects. Merchant’s hire helps broaden out Hilco’s sector expertise which thus far has focused on the telecoms space thanks to the former Rockstar team of Nortel alumni including telecoms CTO Gillian McColgan.

Merchant joins Hilco at a time of significant change in the semiconductor industry. That has included a period of consolidation in the market with a series of billion dollar deals including Avago’s $37 billion takeover of Broadcom (the combined business kept the target’s name) and an ongoing bidding war for Toshiba’s semiconductor business. There has also been an uptick in litigation activity and assets changing hands with some NPEs including WiLAN and new player Longhorn IP building portfolios focused on the sector. 

According to Friedman the activity in the semiconductor sector stems from its importance to two key areas. “It’s the route to both 5G and the Internet of Things,” Friedman explained. “It will be the seed corn around which these next generation technologies get patented.”

“If you think about what new technology will involve over the next 10 to 20 years it’s hard to think that they won’t need some level of connectivity and won’t have semiconductors at their core,” Veschi added. In monetisation terms, the semiconductor industry has tended to take a back seat to telecoms, Hilco’s latest move is a sign that that might be changing.