Industry Ventures, a private equity secondary firm, has announced the close of its fifth fund, Industry Ventures Fund V, with USD265m in committed capital from over 20 institutional inv
Industry Ventures, a private equity secondary firm, has announced the close of its fifth fund, Industry Ventures Fund V, with USD265m in committed capital from over 20 institutional investors.
Originally targeting USD200m, the firm was granted approval by its limited partners to increase its fund size due to investor demand and overall market growth.
It will deploy the new capital in the secondary market consistent with its previous strategy focused on acquiring positions in high quality venture backed companies through positions in venture capital funds and secondary direct transactions.
‘The strength of the secondary market is one of the few bright spots in these challenging economic times,’ says Hans Swildens, principal and founder of Industry Ventures (pictured). ‘As markets dried up in 2008 and the global financial crisis spread, we began to see a proliferation of diverse sellers in the market as the need for early liquidity increased. This increased deal flow coupled with the secondary market’s unique ability to steadily deploy capital resulted in significant investor demand and an oversubscribed fund that was larger than originally intended.’
In 2008, Industry Ventures completed over 40 acquisitions – which included secondary direct investments in private companies and limited partner interests – compared to 27 acquisitions the previous year.
‘Since last quarter, we have seen the volume of secondary deals grow more than 25 per cent and we estimate there is more than USD5bn for sale in the secondary venture capital market. This vibrant market is providing an important liquidity option for entrepreneurs, sellers of venture funds and financial institutions and is contributing to the stabilization of the venture capital and financial markets,’ says Swildens.
Industry Ventures is planning to invest its Fund V over a period of two to three years through new acquisitions of direct investments and limited partnership interests typically ranging in size from USD1m to USD25m each. The firm also has a co-investment capability in Fund V that enables the firm to acquire larger special situation transactions with its limited partners larger than USD25m in size.
