Paladin closes $235m homeland security fund

Washington DC-based Paladin Capital Group’s second fund will focus on early- and mid-stage venture capital investments, although the firm will consider buyout opportunities.

Washington DC-based Paladin Capital Group has announced the close of its second fund dedicated to homeland security on $235 million (€181 million).

Paladin Homeland Security Fund will invest expansion capital in growing companies whose products and services address homeland security issues and needs, according to a statement. Paladin will reportedly invest about $10 million in venture capital per financing round in early- and mid-stage companies, and will also consider buyout.

The firm lists James Woolsey, the director of the Central Intelligence Agency from 1993 to 1995, Kenneth Minihan, and Air Force general and the director of the National Security Agency from 1996 to 1999, and Dr. Alf Andreassen, who formerly worked at AT&T handling the company’s classified national programs.

Investors in Paladin’s new fund included CalPERS and the New York City Public Employees’ Retirement System, and union pension funds such as the Communication Workers of America. Corporate and strategic investors include Siemens Venture Capital, Motorola and the Battelle Memorial Institute.

The new fund is taking a different investment approach from its predecessor. Paladin’s previous fund, closed in 2001 on $208 million, invested mainly in mid-market buyouts in various industries with a handful of venture investments.

So far, Paladin’s new fund has already invested in eight companies, including AgION Technologies, a provider of antimicrobial products; Arxan Technologies, which provides anti-tamper software protection technology; and ClearCube Technology, a producer of hardware and software that enables central management of personal computers.