Fundraising

Investcorp tech fund holds $300m close

Investcorp wrapped up the fundraising for its second ‘venture-buyout’ fund, closing on $300m for its Investcorp Technology Ventures II. The fund, which was oversubscribed, exceeded its target by $50m.

-

Bahrain-based Investcorp has closed its second ‘venture-buyout’ fund, amassing $300 million (€254 million) in limited-partner commitments for Investcorp Technology Ventures II. The firm hit the hard cap on the fund and surpassed an original target of $250 million.

Savio Tung, head of technology investment, Investcorp

Fund II’s predecessor was raised in June of 2001, and locked up $210 million in capital. The latest fund represents an expansion of the firm’s investor base, as Investcorp, for the first time, approached investors from Asia, Europe and the US. The previous fund had only targeted limiteds in the Middle East, and included $50 million of Investcorp capital.

Grove Street Advisors, AlpInvest Partners and UBS Sauerborn are among the new investors in Fund II.

Historically, deals from the Investcorp technology team straddle the line between venture and buyouts, and have ranged from later-stage growth financings of chip maker PortalPlayer to the group’s recent acquisition of Cirrus Logic’s digital video product line, which actually came out of the new fund.

Within technology, the fund specifically focuses on mobile data technologies, enterprise software, communications infrastructure and digital content.

Investcorp’s head of technology investment Savio Tung told PEO that the group is approaching its investments primarily from a buyout investor’s point of view, which he said mitigates risk, but still allows the firm to exclusively go after growth plays.

“We lean more to buyouts and growth capital,” he said. “In this fund, you’ll probably see that 60 percent to 70 percent of our investments will either be in corporate spinouts, take-privates or late stage companies.”

However, in the same breath, Tung adds that a company needs at least “double digit growth to excite us”.

While Investcorp is based in Bahrain, the technology group only maintains offices in the US and Europe. Tung identified that 70 percent of the fund will likely be invested in US companies with the balance going to businesses in Western Europe. He noted that eventually the group may expand its investment reach to include the Middle East or even Asia, but said that such plans are not yet in the foreseeable future.

Gibson Dunn & Crutcher provided legal counsel to the firm, which did not use a placement agent for the fundraising.