Changes in ranks of venture capital firms reflect movement in industry.

This year's List of venture capital firms reflects the revolving door-like atmosphere prevalent in the Southland's link to initial capital sources -- six firms from 1993's List are gone, while six new names appear.

But many that have stayed claim that they did very well in 1993.

"We had record profits and we also had a record investment year," said David Ferguson, a general partner at No. 1-ranked Chemical Venture Partners, a wholly owned subsidiary of New York's Chemical Banking Corp. What's more, he said, there has been a dramatic pick-up in investment opportunities in Southern California over the last six months.

"We're beginning to see corporations and private individuals selling businesses and people who have started businesses looking for growth equity capital," Ferguson said.

Privately owned Enterprise Partners, No. 6 on The List, is equally impressed by what the Southland has to offer. Partner Chuck Martin noted that 80 percent of the companies that the firm invests in are located in Southern California.

"There's a very robust entrepreneurial level of activity here and there are much fewer venture capital firms than there are in other parts of the country," he said.

Enterprise, which rose from No. 12 last year to No. 6 this year, showed the biggest run up the ladder in terms of managed capital. According to the 1994 survey, the firm more than doubled its managed capital to $215 million vs. $100 million in 1993.

"We raised the capital for our third fund on December 3," explained Martin. Seventy percent of the funds came from investors in the firm's other two funds, he added -- an impressive vote of investor approval. He would not disclose the returns that made these investors so eager to invest more money.

Six venture capital names joined the 1994 List: TVM Techno Venture Management, at No. 5; BT Capital Corp., at No. 9; Marwit Capital Corp., at No. 16; National Investment Management Inc., at No. 19; Forrest Binkley & Brown, at No. 23; and Kinship Partners, at No. 25.

Fifteen-year-old BT Capital's managing director, Martin Jelenko, said he hasn't noticed any difference between opportunities available in 1994 and those of 1993.

"It's been a good environment for the past two years because we've happened to have seen a lot of attractive companies that have been looking for our kind of investment capital," he noted. "And the companies we've looked at have been very successful."

"For 1994 we've made a couple of excellent restaurant investments," he said, pointing to Santa Monica's Louise's Trattoria chain of Italian restaurants and Southgate's Royal Rubber & Manufacturing Co. The latter makes doormats from recycled automobile tires.

The six companies debuting on 1994's roster replace six veterans that either closed shop or chose not to respond to survey questionnaires.

Heading the roster of emigres is 1993's top performer, Warburg Pincus Ventures Inc. According to Rodman W. Moorhead III, who manages the company's New York headquarters, the firm closed its L.A. office last August because its managing director, Ed McKinley -- a Southland native who didn't like New York -- decided to relocate to London.

"Without McKinley, we wouldn't have had an L.A. office," Moorhead said. He said he doubts the company will open a new L.A. office in the near future.

Last year's No. 16 firm, Xerox Venture Capital, has moved to Menlo Park and No. 22 on last year's List, Drysdale Enterprises, has relocated to San Mateo. Fairfield Venture Partners, No. 11, and Diehl & Co., No. 25, chose not to respond to the survey. A spokesperson for Forrest Binkley & Brown, No. 23, told the Business Journal's research staff that the firm would not be investing in new venture capital projects.