Will Vertical Turbines Make More of the Wind?

A Caltech researcher thinks arrays of tiny wind turbines could produce cheaper power than big ones.

By Kevin Bullis on April 8, 2013

The remote Alaskan village of Igiugig—home to about 50 people—will be the first to demonstrate a new approach to wind power that could boost power output and, its inventors say, just might make it more affordable.

For decades, the trend across the wind industry has been to make wind turbines larger and larger—because it has improved efficiency and helped lower costs.

John Dabiri, a professor of aeronautical and bioengineering at Caltech, has a heretical idea. He thinks the way to lower the cost of wind power is to use small vertical-axis wind turbines, while using computer models to optimize their arrangement in a wind farm so that each turbine boosts the power output of its neighbors.

Dabiri has demonstrated the basic idea at a 24-turbine test plot in southern California. Grants totaling $6 million from the Gordon and Betty Moore Foundation and the U.S. Department of Defense will allow him to see if the approach can lower wind power costs in Igiugig. The first 10 turbines will be installed this year, and the goal is to eventually install 50 to 70 turbines, which would produce roughly as much power as the diesel generators the village uses now. Dabiri is also installing turbines at an existing wind farm in Palm Springs, California, using his models to generate power by putting up new turbines between existing ones.

Ordinarily, as wind passes around and through a wind turbine, it produces turbulence that buffets downstream turbines, reducing their power output and increasing wear and tear. Dabiri says that vertical-axis turbines produce a wake that can be beneficial to other turbines, if they’re positioned correctly.

The blades of this type of wind turbine are arranged vertically—like poles on a carousel rather than spokes on a wheel, as with conventional wind turbines. Wind moving around the vertical-axis turbines speeds up, and the vertical arrangement of the blades on downstream wind turbines allows them to effectively catch that wind, speed up, and generate more power. (The spinning blades of a conventional wind turbine would only catch some of this faster wind as they pass through it—this actually hurts the turbine’s performance because it increases stress on the blades.) The arrangement makes it possible to pack more turbines onto a piece of land.

Dabiri’s wind turbines are 10 meters tall and generate three to five kilowatts, unlike the 100-meter-tall, multi-megawatt machines in conventional wind farms. He says the smaller ones are easier to manufacture and could cost less than conventional ones if produced on a large scale. He also says maintenance costs could be less because the generator sits on the ground, rather than at the top of a 100-meter tower, and thus is easier to access. The performance of the wind farm at Igiugig will help determine whether his estimates of maintenance costs are correct.

Dabiri says small, vertical wind turbines have other advantages. While the noise of conventional wind turbines has led some communities to campaign to tear them down, his turbines are “almost inaudible,” he says. They’re also less likely to kill birds. And their short profile has attracted a $1 million grant from the Department of Defense to study their use on military bases. Because they’re shorter, they interfere less with helicopter operations and with radar than conventional wind turbines.

The approach, however, faces some challenges. Vertical-axis wind turbines aren’t as efficient as conventional ones—half of the time the blades are actually moving against the wind, rather than generating the lift needed spin a generator. As the blades alternatively catch the wind and then move against it, they create wear and tear on the structure, says Fork Felker, director of the National Wind Technology Center at the National Renewable Energy Laboratory. Dabiri, and researchers such as Alexander Smits at Princeton University, say they are working on improved turbine designs to address some of these issues.

Felker notes that Dabiri’s approach will also require installing a thousand times more wind turbines, requiring potentially millions of wind turbines rather than thousands to generate significant fractions of U.S. power supply. And he notes that, over the last several decades, the wind industry has demonstrated that making ever larger wind turbines lowers costs (“Novel Designs are Taking Wind Power to the Next Level,” “Supersized Wind Turbines Head Out to Sea,” and “The Quest for the Monster Wind Turbine Blade.” “Going in the other direction, I believe, will not be successful,” he says. “I don’t think the math works out.”

Felker thinks that Dabiri’s approach might prove fitting for small, isolated places like Igiugig, where simpler construction and maintenance might be important. “But if you’re trying to transform the overall energy economy,” he says, “you’ve got to go big.”

Twitter Arrives on Wall Street, Via Bloomberg

BY WILLIAM ALDEN

Largely blocked on Wall Street, Twitter is making its big debut on trading desks — via Bloomberg terminals.

Bloomberg L.P. announced on Thursday that it was incorporating tweets into its data service, which is widely used in the financial industry. The new feature allows traders and other professionals to monitor social media buzz and important news about companies they follow.

This arrival of Twitter comes through something of a side door. The big Wall Street banks largely ban the use of Twitter and other social media sites at work, citing regulations governing communication. Though some firms are allowing certain employees onto social media, that usage is carefully controlled.

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Now, bank employees are getting a broader and more organized view of what’s being said in the Twittersphere. Some on Wall Street already use their mobile phones to monitor the site for information that could move stocks.

Bloomberg’s new service shows tweets sorted by company and topic, allowing users to search by key word and to set up alerts for when a particular company is getting an unusual amount of attention.

“We were getting requests from customers who were seeing news they wanted to be aware of on Twitter,” said Brian Rooney, core products manager for news at Bloomberg, who said that compliance officers from Wall Street banks had expressed an interest in allowing employees to see tweets.

But Mr. Rooney added: “This isn’t where you monitor The Onion or Ashton Kutcher.”

Rather, Bloomberg will show tweets from companies, chief executives and other news-makers, in addition to certain economists and financial bloggers. Mr. Rooney cited the economist Nouriel Roubini and Paul Kedrosky, the investor and blogger, as examples.

It’s not uncommon these days for news to surface on Twitter, even before the wire services carry it. This week, the Securities and Exchange Commission outlined rules for disseminating corporate information via social media outlets like Twitter.

“It just seems like there’s been a tipping point where more companies are using Twitter and other social media to put out announcements,” said Ted Merz, news content business manager at Bloomberg. “That’s evidenced by what the S.E.C. put out.”

Homegrown Efforts to Recruit Women in Silicon Valley

By CLAIRE CAIN MILLER

Silicon Valley is not exactly known for its diversity. So when Andreessen Horowitz, the venture capital firm, wanted to make sure its job postings were reaching the most diverse audience possible, its partners did what most people in Silicon Valley do when they spot a problem. They turned to software.

They used programs that analyze the language in job descriptions to catch phrases that might turn off certain types of applicants. Looking for a candidate who is “off the charts”? Chances are, not that many women will apply.

“That’s just not how women talk,” said Margit Wennmachers, a partner at the firm. “They say, ‘Must be highly competent.’ ”

It is an example of many homegrown efforts across the Valley to change the face of the tech industry. There have always been big organizations hosting conferences and networking events for women. But newer efforts are springing up from inside companies.

There are programs to teach girls to code, like Girls Who Code, for which companies like Twitter and Google lend office space and teachers.CodeChix, started by engineers at companies like VMware, hosts coding workshops that promise to be “non-alpha.”

The Club is an application-only group trying to provide an alternative to golf courses and men’s membership clubs by coaching women leaders in Silicon Valley. It was founded by Annie Rogaski, a partner at Kilpatrick Townsend, a Valley law firm.

Rachel Sklar, who started a group called Change the Ratio, is introducing an organization called The List where members who pay have access to other women for advice, financing and conference speaking gigs.

“It’s to achieve the function of the classic old boys’ club, which funnels very easy advice and access and opportunity,” Ms. Sklar said.

At Andreessen Horowitz, the firm asks real people, not just software, to review all job descriptions, too — so in addition to the hiring manager, people who are women, African American and from other minority groups in Silicon Valley have input.

The firm also has a partner in charge of diversity who helps acquire a broad set of candidates for the firm’s talent agency, which its 200 portfolio companies tap for engineering and leadership roles. Despite those efforts, all of the firm’s investing partners are men.

“There’s a huge talent war going on, so we are doing a lot of things to try to surface all kinds of diverse talent and bubble that up to our portfolio companies,” Ms. Wennmachers said.

“What I’d like to see is Marla Zuckerberg and Mary Jobs and Joann Bezos.”

Messenger RNAs Could Create a New Class of Drugs

New partnerships could help bring a novel class of biopharmaceutical to patients.

By Susan Young on April 2, 2013

Messenger RNAs—molecules that carry information between the genome and the protein-building machinery of cells—could become the next big class of biopharmaceutical drug.

These molecules were once thought unusable as drugs because they are notoriously fragile and could rouse an inflammatory immune response. Now, thanks to several recent scientific discoveries, they are attracting the increasing attention of pharmaceutical companies.

Recently, the pharmaceutical heavyweight AstraZeneca announced it would pay Moderna Therapetuics $240 million for rights to the startup’s mRNA technology, which it will use to develop treatments for cardiovascular, metabolic, and cancer patients.

Inside a cell, mRNA serves as an intermediary between DNA-encoding genes and their protein products. As a drug, an mRNA would supply the biological instructions for producing a protein inside cells, perhaps a protein that replaces a missing or broken version inherited as part of a genetic disorder. In some ways, an mRNA would be more efficient than DNA-based gene therapy (which would require the cells to make their own mRNA intermediary before producing a protein) and more effective than recombinant protein therapy. While several companies are developing therapeutic gene-silencing RNAs, which inhibit damaging proteins from being made in the body (see “RNAi Drug for Cholesterol” and “Gene Silencing Technique Targets Scarring”), few have tried adapting mRNAs to bring in beneficial replacement gene products.

One reason is that natural mRNAs stir up trouble in the body. “If you inject regular mRNA into the body, the body thinks it’s a virus, so you get a very strong innate immune response,” says Stephane Bancel, CEO of Moderna, based in Cambridge, Massachusetts. To avoid this reaction, Moderna changes some of the building blocks of its mRNAs, known as nucleotides, so that the immune system no longer recognizes the molecule as dangerous. Of the four possible nucleotide “letters” in an mRNA, the company uses one or two variants or analogs of the standard nucleotides when synthesizing its mRNA. These analogs exist naturally in cells, but the idea that subbing them into mRNA sequences could avoid an immune system response is only a few years old—it was first reported by University of Pennsylvania School of Medicine researchers in 2005.

The substitutions seem to help another hangup with mRNAs—their notorious fragility. “Everybody considers mRNA to be the most unstable molecule you can think of,” says Christian Plank, founder and chief scientific officer of Ethris, a German company also developing modified mRNAs as drugs. “This opinion is still in the minds of most people and is a major reason why only a few people have thought of using it,” says Plank.

The analogs make the mRNAs more stable, and the company has shown that the molecules can last for up to 72 hours in the body, says Bancel. In comparison, some protein therapies can be gone within a few hours, he says.

Once injected, the mRNA is taken up by cells, says Bancel. The cell’s machinery then reads the mRNA and produces whatever protein it encodes. “The beauty is that the patient’s cells produce the drug,” says Carsten Rudolph, CEO of Ethris. That means that the proteins made from an injected mRNA would carry less of an immune response risk than if the proteins were made in bacteria or yeast and then injected, says Rudolph. And more proteins may then be available to patients, because not every protein can be manufactured at large scale.

Finally, mRNAs cannot integrate into the genome and so do not present the same risk of disrupting normal gene that DNA-based gene therapies do. “In general, gene therapy is a good approach, and in recent years there have been good breakthroughs, but for non-life-threatening disease, you want to avoid any potential risk you can think of, and integration into the genome is a known risk,” says Plank.

Ethris also recently partnered with a pharmaceutical companyShire, based in Massachusetts—to develop treatments for patients with rare diseases based on its technology. Success for either AstraZeneca or Shire will require a venture into still uncharted waters: the first in-patient studies of the new biopharmaceutical.

How to Make a Computer from a Living Cell

Genetic logic gates will enable biologists to program cells for chemical production and disease detection.

 By Katherine Bourzac on March 28, 2013

If biologists could put computational controls inside living cells, they could program them to sense and report on the presence of cancer, create drugs on site as they’re needed, or dynamically adjust their activities in fermentation tanks used to make drugs and other chemicals. Now researchers at Stanford University have developed a way to make genetic parts that can perform the logic calculations that might someday control such activities.

The Stanford researchers’ genetic logic gate can be used to perform the full complement of digital logic tasks, and it can store information, too. It works by making changes to the cell’s genome, creating a kind of transcript of the cell’s activities that can be read out later with a DNA sequencer. The researchers call their invention a “transcriptor” for its resemblance to the transistor in electronics. “We want to make tools to put computers inside any living cell—a little bit of data storage, a way to communicate, and logic,” says Drew Endy, the bioengineering professor at Stanford who led the work.

Timothy Lu, who leads the Synthetic Biology Group at MIT, is working on similar cellular logic tools. “You can’t deliver a silicon chip into cells inside the body, so you have to build circuits out of DNA and proteins,” Lu says. “The goal is not to replace computers, but to open up biological applications that conventional computing simply cannot address.”

Biologists can give cells new functions through traditional genetic engineering, but Endy, Lu, and others working in the field of synthetic biology want to make modular parts that can be combined to build complex systems from the ground up. The cellular logic gates, Endy hopes, will be one key tool to enable this kind of engineering.

Cells genetically programmed with a biological “AND” gate might, for instance, be used to detect and treat cancer, says Endy. If protein A and protein B are present—where those proteins are characteristic of, say, breast cancer—then this could trigger the cell to produce protein C, a drug.

In the cancer example, says Endy, you’d want the cell to respond to low levels of cancer markers (the signal) by producing a large amount of the drug. The case is the same for biological cells designed to detect pollutants in the water supply—ideally, they’d generate a very large signal (for example, quantities of bright fluorescent proteins) when they detect a small amount of a pollutant.

The transcriptor triggers the production of enzymes that cause alterations in the cell’s genome. When the production of those enzymes is triggered by the signal—a protein of interest, for example—these enzymes will delete or invert a particular stretch of DNA in the genome. Researchers can code the transcriptor to respond to one, or multiple, different such signals. The signal can be amplified because one change in the cell’s DNA can lead the cell to produce a large amount of the output protein over time.

Depending on how the transcriptor is designed, it can act as a different kind of logic gate—an “AND” gate that turns on only in the presence of two proteins, an “OR” gate that’s turned on by one signal or another, and so on. Endy says these gates could be combined into more complex circuits by making the output of one the input for the next. This work is described today in the journal Science.

MIT’s Lu says cellular circuits like his and Endy’s, which use enzymes to alter DNA, are admittedly slow. From input to output, it can take a few hours for a cell to respond and change its activity. Other researchers have made faster cellular logic systems that use other kinds of biomolecules—regulatory proteins or RNA, for example. But Lu says these faster systems lack signal amplification and memory. Future cellular circuits are likely to use some combination of different types of gates, Lu says.

Christopher Voigt, a biological engineer at MIT, says the next step is to combine genetic logic gates to make integrated circuits capable of more complex functions. “We want to make cells that can do real computation,” he says.

Obama launches research initiative to study human brain

By Jeff Mason

WASHINGTON | Tue Apr 2, 2013 12:09pm EDT

(Reuters) – The White House unveiled details on Tuesday of a new initiative to study the human brain with the goal of creating effective treatments for Alzheimer’s disease and other disorders.

Called the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative, the program aims to help researchers see how brain cells and neural circuits interact through technology that produces “dynamic pictures” of the brain.

It is to be funded with $100 million from President Barack Obama’s fiscal 2014 budget. The White House is slated to release Obama’s budget next week.

The Democratic president, who is in a standoff with Republican lawmakers over how to reduce the U.S. deficit, has maintained that investment in areas such as education and research and development are critical even as spending cuts are necessary to address the country’s fiscal woes.

Obama made that case again when unveiling the initiative at a White House ceremony filled with scientists.

“There is this enormous mystery waiting to be unlocked, and the BRAIN Initiative will change that by giving scientists the tools they need to get a dynamic picture of the brain in action and better understand how we think and how we learn and how we remember,” he said.

“We can’t afford to miss these opportunities while the rest of the world races ahead. We have to seize them. I don’t want the next job-creating discoveries to happen in China or India or Germany. I want them to happen right here,” he said.

The funding requires congressional approval, but agencies have some discretion to start working on the program ahead of time, a White House spokesman said.

The program drew praise from groups advocating for Alzheimer’s and autism research.

“The federal government has realized incredible success when it invests in tackling challenges of this magnitude, and Alzheimer’s will be no different,” said Harry Johns, president and chief executive of the Alzheimer’s Association, in a statement.

“Investments in brain research such as this project are essential for understanding and developing better treatments for autism,” said Liz Feld, president of Autism Speaks, in a statement.

Two reports released last month showed that deaths and the risk of dying from Alzheimer’s disease have risen significantly in the United States during the last decade.

Researchers said in February that the number of U.S. residents aged 65 and older living with the brain-wasting disease would nearly triple to 13.8 million by 2050, drawing attention to the need for further study.

(Additional reporting by Gabriel Debenedetti and Julie Steenhuysen; Editing by Philip Barbara)

Pension plan advisors see top gains in emerging market stocks

By Sam Forgione

NEW YORK | Tue Apr 2, 2013 11:59am EDT

(Reuters) – Consultants who advise companies on how to manage their employees’ retirement plans expect emerging market stocks to outperform in a lower-return environment over the next several years, a survey by bond giant PIMCO showed on Monday.

The survey, which tracked 51 consulting firms, found that many of them expect emerging market stocks to outperform all other asset classes, but with greater volatility. In addition, 65 percent of the firms expect lower returns and higher volatility in various asset classes over the next two to five years.

The findings come as investment returns from “junk” bonds and government guaranteed mortgage securities to even some battered euro-zone debt have dropped against the backdrop of global central bank policies intended to suppress borrowing costs.

Corporate pension plans are hard-pressed to generate profits amid a low interest-rate environment and rising funding shortfalls. The 100 largest U.S. pension plans had a record funding deficit of $388.8 billion at the end of last year, a $61.1 billion increase from 2011, according to consulting firm Milliman, Inc.

A significant portion of the consulting firms in the PIMCO survey, which advise an average of $48 billion each in 401(K) plan assets, forecast that emerging market stocks will earn a 10 percent return over the next three to five years.

Despite that strong forecast and expectations of lower returns overall, 60 percent of the firms recommended cutting exposure to risk assets, including stocks. Among the firms, 81 percent also suggested adding inflation-protected securities, including Treasury Inflation-Protected Securities, to retirement portfolios.

Among the firms, 78 percent also predict that corporations will add global stocks to their retirement plans.

Newport Beach, California-based Pacific Investment Management Co., or PIMCO, has conducted the Defined Contribution Consulting Support and Trends Survey annually for the past seven years. PIMCO had $2 trillion in assets at the end of last year.

The company, run by founder and co-chief investment officer Bill Gross and chief executive and co-chief investment officer Mohamed El-Erian, runs the PIMCO Total Return Fund, the world’s largest mutual fund with over $288 billion in assets.

PIMCO also managed nearly $174 billion in retirement plan assets as of December 31, 2011. Gross has warned of lower returns on financial assets, particularly high-yield bonds and stocks, in his monthly letters to investors.

Many of the consulting firms surveyed, which included JP Morgan Performance Analytics & Consulting and Morgan Stanley Smith Barney, recommended adding emerging market bonds,commodities, and high-yield “junk” bonds to retirement portfolios in target-date funds.

Among the firms, 61 percent said that emerging market debt would be valuable to add, while 49 percent vouched for commodities and 39 percent vouched for high-yield.

Nearly all of the firms – 98 percent – also suggested that companies offer target-date and target-risk strategies in retirement plans.

Target-date strategies aim for a retirement date and shift asset allocation from riskier assets like stocks to more stable assets like bonds as the retiree ages.

(Reporting by Sam Forgione; Editing by Jennifer Ablan and Jim Marshall)

Why stock picking works when investing overseas

By David Randall

NEW YORK | Tue Apr 2, 2013 12:00pm EDT

(Reuters) – When it comes to picking funds, most investors would do themselves a favor by ignoring stock picking altogether.

Nearly 70 percent of all actively managed U.S. equity funds lagged their respective benchmarks over the last five years, according to a report by S&P Dow Jones Indices. About 92 percent of small cap growth funds, for instance, underperformed the S&P Small Cap 600 over that time period, while 78 percent of large-cap core funds fell behind the benchmark S&P 500. No wonder, then, that 27 percent of domestic actively managed equity funds merged or shut down over the last five years.

International small-cap equity funds was the lone category in which portfolio managers consistently added value for investors, the report showed. About 79 percent of funds in the category beat their benchmark over the last five years, compared with 26.3 percent for international stock funds as a whole.

The reason appears to be simple. With fewer analysts covering small international companies, individual portfolio managers are more likely to have an informational advantage over the broad market.

“It comes down to efficient markets. When you are looking at a large cap company, there are going to be dozens and dozens of analysts poking around the company,” said Jeff Tjornehoj, head of Lipper Americas Research.

“But with small caps, especially overseas, you tend to have situations where a portfolio manager may have the most informed opinion about what a stock price means in relation to the company’s potential earnings,” he said. Lipper is a unit of Thomson Reuters.

Funds in the international small cap universe also appear more likely to take larger positions in companies that have small weightings in the benchmark index, said Aye Soe, a director at S&P Dow Jones Indices, who authored the report.

HOW TOP FUNDS ARE INVESTING

Portfolio managers of top-performing international small-cap funds say that the large number of potential companies makes it easier to find attractive options.

“It’s difficult for the market to be efficient in such a large asset class,” said Josephine Lewis, a portfolio manager of the $60 million Harding Loevner International Small Company fund. “It’s up to more niche players who are going to be doing fundamental analysis to come in there.”

Lewis’s fund screens about 10,000 companies around the globe, compared with 3,405 companies in the S&P Developed Ex-U.S. Small Cap index, she said, looking for companies with strong balance sheets and consistent profits.

Lewis is significantly overweight in healthcare, industrials and consumer staples companies and underweight financials and energy companies. Her fund has returned an annualized 7 percent over the last five years, which was 4.6 percentage points more than the average fund in the category, according to Lipper data.

Lewis often looks for companies with strong brand names and other lasting competitive advantages. The fund’s top holding, Super Group Ltd, a maker of instant beverages and snacks, jumped 114 percent over the last year as its sales grew at a rate more than double that of its competitors. The Singapore-based company, whose brands include Cafe Nova, Owl and Coffee King, sells its instant beverages and snacks in over 50 countries, with a significant portion of revenues coming from emerging market countries in Asia. Lewis said she likes the company, which has a $1.7 billion market-cap, because of its brand name and its premium product pricing.

She has also been adding to her position in German apparel retailer Gerry Weber International AG. The company, which Lewis calls “the Chico’s of Germany” because of its focus on upper-middle-class women, is up 17 percent over the last year thanks in part to a 15.7 percent jump in fourth-quarter earnings. The $2 billion market cap company announced plans in January to expand its presence outside of the euro zone in Russia, the Middle East and North America.

For the $847 million Wasatch International Growth fund, it attributes its outperformance to a well-timed bet on Japan and a focus on consumer companies. The fund increased its allocation to Japanese stocks to 11 percent in 2012 from 6 percent in 2011 and has benefited from a 42 percent jump in the Nikkei 225 since October.

The fund, whose annualized return of 8.9 percent over the last five years made it the top-performing fund in the category, is especially interested in companies that use their Web presence to build market share, said Linda Lasater, a senior equity analyst who works on the fund.

One recent addition to the firm, for instance, is Domino’s Pizza Group PLC, Britain’s biggest pizza delivery company. The company’s shares are up 35 percent over the last year, and it plans to expand in Germany, Switzerland, Luxembourg and Liechtenstein. In addition to the company’s strong cash flow, Lasater likes that over 50 percent of the company’s UK sales come from online orders.

“You get better data, you can target the customers better, and costs are lower because you have more accurate orders,” she said.

Another fund holding, CarSales.com LTD, holds a “basic monopoly” in Australia’s online classified ads service, Lasater said. The company, which has a market cap of $2.2 billion and announced plans last month to buy nearly 20 percent of competitor iCar Asia Ltd., is up 66.8 percent over the last year.

“People constantly underestimate how much more migration there is from print to online,” Lasater said.

Along with the Wasatch and Harding Loevner funds, other top-performing funds in the category include the $446 million Westcore International Small-Cap Fund, which gained an annualized 8.7 percent over the last five years, and the $822 million Franklin International Small Cap Growth fund, which gained 7.7 percent a year over the time frame.

(Reporting By David Randall; Editing by Jennifer Merritt and Leslie Adler)

Microsoft co-founder to open investment office in Silicon Valley

By Bill Rigby

SEATTLE | Mon Apr 1, 2013 7:08pm EDT

(Reuters) – Paul Allen, the billionaire co-founder of Microsoft Corp, is opening an office in Silicon Valley to make new investments in emerging technology and internet companies.

The Palo Alto office, set to open in the next few weeks, will operate under the name of VulcanCapital, the investment arm of Allen’s Seattle-based Vulcan Inc, which manages his personal fortune, valued at about $15 billion.

Allen, 60, co-founded the world’s largest software company with Bill Gates in 1975, but left in 1983 after a bout with cancer. The riches he amassed through his large stake in the company, plus successful investments in sports and real estate, have made him the world’s 53rd richest person, according to Forbes magazine.

A pioneer in the early development of PC software and Microsoft’s technical leader for its first eight years, Allen has been a prolific tech investor since the mid 1980s, starting several companies and founding a tech incubator called Interval Research.

He has put money into hundreds of enterprises in the past 30 years, including large stakes in AOL, Ticketmaster, film studio DreamWorks SKG and cable firm Charter Communications. His record has been checkered, making money on AOL and DreamWorks SKG, but losing billions of dollars on the bankruptcy of Charter.

Newer tech investments include online real-estate agent Redfin, shopping adviser Decide.com and smartphone audio software maker Audience Inc.

The new office in Palo Alto will focus on emerging internet, software and technology companies, including middle and late-stage venture capital and pre-IPO deals, Paul Ghaffari, Vulcan Capital’s chief investment officer, told Reuters.

“We are going to expand our footprint in broad tech investments, we’d like to get more resources, people on the ground there (Silicon Valley),” said Ghaffari. “We have a real appetite to put new ideas in the portfolio.”

The leader of Palo Alto office is expected to be announced in the next few days.

The arrival of Allen’s empire in Silicon Valley may not be immediately popular with the biggest local companies.

The now-defunct Interval Research filed a lawsuit in 2010 against Valley stalwarts Apple IncGoogle Inc, Facebook Inc and others, claiming they stole its inventions, 300 of which are patented. The case is proceeding slowly in the courts.

(Reporting by Bill Rigby; Editing by David Gregorio)