Austin Ventures, headquartered in Austin, Texas, has raised $900 million (€615 million) for its 10th fund bringing capital under management to $3.9 billion.
The fund is made up of two pools of capital, $600 million in the main fund with $300 million available to draw upon for larger transactions.
“It’s a way of being fee efficient for our limited partners,” said Austin Ventures general partner Phil Siegel. Fees are charged on the smaller pool of capital only when it is drawn down, he explained.
The capital was raised largely from existing limited partners over the course of 10 months. The firm also added approximately four or five new investors through a combination of marketing to investors and fielding inquiries, said Siegel.
It's a way of being fee efficient for our limited partners
Fund X has already made two investments out of an expected 30 to 35 total investments during its lifetime. The firm's prior fund closed on $525 million in 2006.
Austin Ventures last month closed a growth equity investment in Lake Jackson, Texas-based Delta Rigging & Tools with capital from both funds IX and X. The firm will announce a second investment with capital from Fund X in the near future, said Siegel.
Austin Ventures invests nationally with a focus on Texas. The firm’s last two funds have deployed approximately 60 percent of their capital in Texas.
“I don’t see any reason for that to change in Fund X,” said Siegel.
Austin Ventures makes “very early stage” venture investments and later stage growth equity investments, said Siegel. The firm's target sectors for investment include financial, business, information and healthcare services as well as software, internet and semiconductors.
The firm's investment sizes can range from $100,000 to $100 million and the deployed capital is split roughly evenly between early stage venture and growth equity investments. Approximately two-thirds of transactions by quantity are venture investments.