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It appears that the world of porn is getting more attention from private equity and venture capital investors. And, no, it isn't that private equity executives and deal makers are spending more time looking at porn than they are negotiating deals. (Well, maybe.) More importantly, a big investor in the space has won an award and may be opening a floodgate of capital

AdultVest is a private equity venture that we covered on its launch earlier this year. The company concentrates exclusively on adult industry investments, mergers and acquisitions. So far, its initial numbers are pretty stellar.

It claims to have some $7.9 billion in "available capital" to invest in adult themed businesses, and $286 million of that was raised "within the last 7 days." It also claims to have 3,809 registered investors, with 53 of those signing up in the last week. (This data is from the group's homepage.)

The big news is that AdultVest was just selected by Alternative Investment News as one of four funds nominated for the "Hedge Fund Launch of the Year" award. And last month, the company announced it was acquiring iPorn.com.

Reading through the earnings release that Rick's Cabaret International Inc. (NASDAQ: RICK) produced earlier today, you might be tempted to conclude that adult entertainment is immune to a slowing economy. On the other hand, the incredibly poor recent performance by Playboy Enterprises inc. (NYSE: PLA) might make you conclude that the gathering slowdown could hurt this sector.

There are a number of reasons that the investment community is trying to get into and make money from porn. The most obvious one is that you are reading about it right here right now.

PurePlay has announced the closing of Series C equity financing round for $15 million. The company claims to be the first and the largest online, legal non-gambling poker site with a record 1 million users and to-date has given away $3 million in cash prizes. The funding will allow PurePlay to increase marketing and expand infrastructure to handle the rapid growth.

Investors include Bay Partners, Ron Conway, James Joaquin, and other Silicon Valley investors. Ron Conway formerly headed Angel Investors LP and is currently an independent angel investor. He wrote "The Godfather of Silicon Valley" and, notably, he sits on the boards for Facebook, Plaxo, Anchor Intelligence, Associated Content and Zappos. He was also an initial investor in Google. James Joaquin funded When.com, presided over OFoto and Xoom and acts as a venture partner at Bridgescale Partners.

Maybe this company doesn't even need the potential regulatory loosening up that has been proposed by Barney Frank.

GodTube has reportedly received a $30 million investment from hedge fund GLG Partners, according to PaidContent. The news came on Sunday, unsurprisingly.

GodTube is a quickly growing Christian online video sharing and social networking website and previously received $2.5 million in funding, some from private investor Norm Miller of Interstate Batteries.

The site now has 2 million users per month and was launched less than a year ago in Dallas. CEO Chris Wyatt formerly acted as an executive producer at CBS.

While $30 million sounds like a massive amount, the costs of broadband make it a normal investment for comparable video sharing sites. Recently, GLG invested in digital media companies Glam Media and Spinvox. This round of funding for GLG Partners is $150 million.

Also according to the article in PaidContent, GLG Partners and GodTube each declined comment on the rumored investment.

Israel Cleantech Ventures (ICV) has closed its capital raise at $75 million, according to Reuters. The original target for the fund focused on clean technology exceeded its target of $60 million and they had to turn away additional investors.

Specifically, the fund will focus on Israel based or related high growth clean technology companies in sectors such as alternative energy, water conservation and purification, emissions reduction, and technologies that allow businesses to operate more efficiently and more environmentally friendly. Funded in 2006, ICV closed its first round of funding, raising $15 million in January 2006. The Globes in Israel reported that this was above target as well.

Funds came from institutional investors as well as family funds in the U.S., Europe, and Israel, such as Robeco Private Equity, a Netherlands-based asset manager, and Piper Jaffray, a U.S. financial institution.

The fund has completed seven investments, including Aqwise (waste water treatment), CellEra (fuel cells), Citrine Renewable Energy (landfill biogas treatment), Emefcy (energy production from wastewater), Metrolight (energy efficient lighting), Project Better Place (electric vehicle infrastructure), and Pythagoras Solar (solar energy).

Jon Ogg is an editor and producer for the Special Situation newsletter for 247WallSt.com.

Quaker BioVentures closed its second fund that focuses on life science companies in the Mid-Atlantic region at $420 million, beating a target of $120 million.

The first fund closed for $280 million and invested in 24 companies. The fund has been successful, with Amicus Pharmaceuticals going public last May, while Eximias and MedMark were each acquired in spring of 2006. BioRexis Pharmaceutical Corp. and Precision Therapeutics are pending acquisitions.

The second fund has already invested in five companies including Argolyn BioScience, Diasome Pharmaceuticals, EKR Therapeutics, Optherion, and Transave. Quaker's partners for the fund include Sherrill Neff, Brenda Gavin, Richard Kollender, Ira Lubert, Adele Cirone Oliva and Dr. Matthew Rieke. The limited partners for the second fund have not been disclosed, however, Thomson Reuters reported that the Pennsylvania Public School Employees' Retirement System and the Pennsylvania State Employees' Retirement System have invested.

Jon Ogg produces and edits the Special Situation Investing Newsletter for 247WallSt.com.

While venture capital investments are still strong, the rate that VC's are putting funds into ventures appears to be slow. A MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) based on data provided by Thomson Reuters shows these trends today.

Investment levels and deal volume dropped, but the report says that venture capital remains strong with deep pockets this quarter with what is still the fifth highest level of investment since 2001. Venture capital investments totaled $7.1 billion in the first quarter of 2008, down 8.5% from last quarter 2007 of $7.8 billion. Deal volume also decreased slightly, down to 922 deals from 1,045 deals.

What industries are taking the bulk of the cash? Life Science (which includes biotech and medical devices) took a third of total cash at $2.3 billion and 24% of deals at 220. The Clean Tech center took $625 million in 44 deals, a 6% dip in investment levels from last quarter. Internet-specific companies tagged $1.3 billion in 195 deals, down 7% from last quarter. Semiconductors saw investment levels going up to $566 million from $458 million. The quarter also saw a trend of decreasing investment levels in companies receiving their first-time financing. Companies receiving first-time financing received $1.6 billion in 294 deals, down from $2.2 billion on 360 deals. Media/Entertainment is the only industry seeing a jump in first-time financing.

This also shows the stages on top of the industries. Seed/early stage companies dipped to $1.7 billion with an average deal size for seed being $3.6 million and $5.7 million for early stage companies. Expansion stage financing stood unmoved at $2.9 billion with an average deal size of $9.0 million. Investments in late stage deals also dropped, hitting $2.6 billion with an average deal size of $9.6 million.

Jon Ogg is a producer and editor of the Special Situations newsletter for 247WallSt.com.

IndexAtlas has announced the launch of the $50 million Art Industry Fund, an alternative private equity fund targeting only businesses that serve the art industry.

This will include such operations as auction houses, advisory services, financial and security firms, software and media companies. Each investment is intended to last four years and will range from $3 to $8 million. The fund is expected to close by December 31, 2009.

CEO and founder of IndexAtlas, Sergey Skaterschikov, believes the fund will generate an IRR of 35% and bases his investing strategy on his book, "Skate's Art Investment Handbook." Skaterschikov established IndexAtlas in 2001 and manages $400 million in fully invested funds and has advised on $2.4 billion in transactions.

There have been many such reports in here showing how there has been a convergence of private equity and venture capital. If this isn't a prime example of that, then nothing else is.

If I didn't know better, it almost sounds a lot like a Sotheby's (NYSE: BID) incubator fund, although it's not.

OLX, a CraigsList look-alike, has secured some $13.5 million in second round funding according to a report from PEHub.com. Backers are listed as General Catalyst Partners, Bessemer Venture Partners, Founders Fund and DN Capital.

This is one we have looked into before when doing comparisons. It is of those online portal and classifieds destinations that has sprouted up on the web last year (although it says founded 2006). The focus on this one seems to be more of an international focus rather than US-dominated, although many listings are in the U.S.

OLX says that it means free local classifieds on a global level, which allows users to meet others, express themselves, trade products, find jobs, apartments, offer services, and more. According to its own site, the company is privately held and was founded in 2006. The service does say it will send an accept PayPal payments.

The company site lists the following as its target markets: Algeria, Argentina, Australia, Belarus, Belgium, Brazil, Canada, Chile, Colombia, Ecuador, France, Germany, Hong Kong, India, Indonesia, Ireland, Italy, Malaysia, Mexico, Morocco, New Zealand, Pakistan, Paraguay, Peru, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Switzerland, Taiwan, Thailand, Tunisia, Ukraine, United Arab Emirates, United Kingdom, United States, and Venezuela.

Interestingly enough, it also says users can be assured of a spam-free experience. Did they figure out a way to keep the Indian IT shops from sending you spam email for an IT request that you specify as on-site and local only with the request of no foreign firms sending emails (and they still do!)? While it is a Craigslist look-alike, the number of postings and the offerings seem a small fraction in comparison.

Altira Group LCC, a player in energy technology venture capital and private equity funding, has announced an investment in Evolutionary Genomics (EG). Evolutionary Genomics sounds a little misleading in name because the company is focused on developing improved biofuel feedstocks. The funding will come out of Altira's $176 million Altria Technology Fund V.

Evolutionary Genomics developed a patented gene discovery technology platform to screen gene adaptations in biofuel feedstocks, which it hopes to improve yields and make biofuel a more viable and sustainable alternative energy solution.

Altira noted its belief that biofuel production is moving toward long-term commercial viability. the company will support and accelerate that direction as these two note that the in-house technology is among the most promising bioscience in this area.

Money is still heading into this direction, particularly as oil has stayed over $100 per barrel. There is just a huge difference between businesses that are subsidized and those that are not. When these are profitable with no subsidy and profitable with energy prices at much levels, that's when they are interesting. That is also why you are starting to see private equity firms compete with venture capital firms in the sector.

The CalCEF Clean Energy Angel Fund I, LP announced today that it has secured initial investments for its fund that focuses on "earning market-based returns" on early-stage clean energy companies.

The CalCEF Fund investors include several limited partners as well as private and institutional investors. Founded by California Clean Energy Fund (CalCEF), the Angel Fund strives to fund the developments of new clean energy technologies, a sector that accounted for less than 4% of total venture capital funding in 2007.

A primary focus will be on giving very early stage companies a small boost to be more attractive to later stage venture capital funding. It's probably a safe bet that some private equity will end up in here as it has in so many other competing deals.

Susan Preston is General Partner of the Angel Fund, and she believes there is a significant funding gap for this industry and really wants to push new clean energy technologies in California and possibly nation-wide through the Angel Fund. Interestingly enough, no size of deals were listed, nor was the total amount of this sub-fund. As it is an "angel" stage, many such investments may run even under $1 million.

After seeing public solar companies flourish with exponential returns in recent years, it's no huge surprise that more and more money will work its way to renewable energy, alternative energy, clean energy, and even less-dirty energy.

IDFC Private Equity Fund II has announced today that they invested 400 million Rupees in India's carbon credit advisory firm, Emergent Ventures India PVT. Ltd. In dollar terms this nets out a mere $10 million or so based upon a currency conversion of 39.975 Rupees per 1 U.S. Dollar. This almost sounds more like a venture capital investment rather than a private equity transaction, but either way it is worth looking into.

Emergent Ventures provides solutions for the domestic and international carbon market. The investment by IDFC is intended to enhance Emergent's South and Southeast Asia businesses and to build on its current capabilities.

The investment is said to be listed as "illustrates both companies' commitments to environmental friendly and sustainable energy."

frankly, the size of this is not important as the implications of bringing awareness of this trend for carbon offsets into the large former third world countries we all refer to now as developing nations.

Carbon emission trading and other such activities are still heavily debated as far as the overall benefits since much of this is a zero sum game and since it merely sets the price of over-pollution. As far as the overall arguments on both sides, the jury is still out.

AirNet Systems, Inc. (AMEX: ANS) has entered into a definitive merger agreement with an affiliate of Bayside Capital. The size of this deal is tiny when you compare it to the massive billion dollar club deals, but deals of this size also have a much better chance of being able to be financed and the size is such that banks won't have to come up with three million excuses not to fund.

AirNet Systems is a provider of specialized cargo airline and expedited transportation solutions for time-critical shipments like people that must get somewhere 10-minutes-ago, items like canceled checks and other key parcels. Here is their route structure that it operates in a spoke system if outside of that group. The website says that the company operated 130 aircraft, although that appears to be an old figure.

The company will be acquired for $2.81 per share, a transaction valued at $28.7 million. The offer represents a 94% premium to Friday's $1.45 closing price.

As already noted, the size here is tiny. But this niche is one that sees steady interest from public companies and private companies in what feels like a "regardless of the economy stance" over the last decade. What is even more interesting is that the size of a deal like this crosses over with venture capital players, even if it is already a developed company. VC's have funded many logistic and niche shipping companies over the last decade and there has been a major consolidation of the smaller players.

The board approved the transaction and awaits shareholder approval in a special meeting. The current management team will continue to manage the company upon completion of the transaction which is expected to close in the second quarter of 2008. AirNet shares are up over 80% today to $2.63, representing a $26.7 million market cap. The 52-week range is $1.38 to $3.69, so this might not be a 100% assurance that all shareholders will vote along with the deal.

This morning there was a rather interesting private equity venture. The AES Corporation (NYSE:AES) and Riverstone Holdings LLC, a New York-based energy and power-focused private equity firm, have announced that they have committed up to $1 billion as part of a new joint venture. This joint venture will develop utility-scale solar photovoltaic (PV) projects. Translation: large projects for communities more than small individual projects. This deal isn't unique, but it is rather unusual for traditional private equity.

This will be called AES Solar, and AES and Riverstone will each provide up to $500 million of capital over five years to invest in PV solar projects globally. This follows the traditional independent power producer and wind business growth models noted geographically with favorable tarrifs and incentives. AES also noted that alternative energy currently accounts for 20% of its global generation capacity. The joint venture will be managed by a seven-member board of directors and three directors each will be appointed by AES and Riverstone. It noted that the target is for power grids that range from two to fifty Megawatts in size.

This is not the first such venture in the sector, but this is a rather large commitment in the current environment. This almost sounds like chasing a hot sector after the likes of Al Gore's deeper involvement in investing in the sector from November. It also seems more "VC-esque: than traditional private equity. The lines between private equity and venture capital may be blurring further as capital competes for more deals.

Riverstone has invested in other green and traditional ventures, and here are its other portfolio companies.

Continuing to reach along the retail technology food chain, consumer electronics retailer Best Buy Co. (NYSE: BBY) is assembling its own corporate venture arm to act as a source of "innovative growth options for the enterprise rooted in smaller, more innovative and potentially disruptive opportunities."

Best Buy isn't trumpeting this move. Rather, it is quietly searching for investment expertise through job postings, as noted in a CEPro blog entry Tuesday (and flagged by Paul Kedrosky's Infectious Greed). The company describes Best Buy Capital as having two thrusts:

• A program ("Core Fund") supporting investment opportunities for current business units consistent with our past investment activities; and
• A new strategic initiative ("Alpha Fund"), which provides a market-based mechanism for Best Buy to proactively participate in and encourage consumer innovations and disruptions by making direct investments in companies that are early on in its life cycle.

Continue reading at TechConfidential.com.

Some scandals wreck public figures on Wall Street, while others act as mere speed bumps. It looks like the latter is true for Frank Quattrone, one of the most influential investment bankers in the 1990's who was also the head of the Credits Suisse (NYSE: CS) technology banking group.

Frank Quattrone has just announced that he and some former colleagues are launching a new financial services venture called Qatalyst Group. Qatalyst will be a technology-focused merchant banking boutique headquartered in San Francisco, CA.

Qatalyst Partners, its investment banking business, will provide high-end merger & acquisition and corporate finance advice to technology companies. Its investing business, Qatalyst Capital Partners, will make selective principal investments, typically alongside leading venture capital and private equity firms.

Qatalyst Partners notes in its release that it will provide "high quality, independent advice to the senior management teams and boards of the technology industry's established and emerging leaders on strategic matters crucial to their growth and success."

Qatalyst will combine a broad network of relationships with deep sector knowledge and seasoned M&A expertise. In addition to merger & acquisition advice, Qatalyst Partners will also advise companies on capital structure and capital raising alternatives, and will selectively raise private capital for clients.

While it will not engage in public securities research, sales, trading or brokerage, Qatalyst Partners may participate as advisor or underwriter in clients' public offerings.

It looks like Wall Street just got a new technology boutique that will be involved in venture capital, private equity, and bringing companies public.