Summit Partners in double fund close

The Boston-based private equity firm has closed two new funds on more than $3.3bn.

Summit Partners has closed a new private equity fund on $3 billion (€2.5 billion), as well as a new venture capital vehicle on $300 million. It is the Boston firm’s seventh private equity fund and its second VC fund.

Scott Collins, a partner with the firm’s London office, said the new funds will pursue the same strategy as the previous funds, focusing on the technology, healthcare and financial services sectors, as well as consumer and industrial products. He said Summit only invests in mature companies in growth sectors, rather than early-stage or concept companies. 

Collins added that the new funds would be looking for more investments in Europe.  

Summit Partners Private Equity Fund VII will make investments between $25 million and $450 million in portfolio companies, while Summit Partners Venture Capital Fund II will invest $5 million to $25 million per company.

Limited partners in the fund include pension funds, university endowments, financial institutions and corporations, with around 85 percent of previous investors re-upping for the new offerings. According to the firm’s website, Summit investors include Georgia Tech, Harvard University, California State Teachers’ Retirement System, Delaware Public Employees’ Retirement System and Adams Street Partners.

In May, the Pennsylvania State Employees’ Retirement System committed $25 million to the VC fund and $110 million to the private equity fund.

“We had quite a few repeat investors,” Collins said. “We also had an objective to add new investors.” Collins said the firm particularly focused on attracting more European LPs.

Collins said fundraising took about three months. He said the first investments from each fund could come in the latter part of 2005.

The firm’s last private equity fund closed on $2 billion in 2001. Its last VC fund closed the same year on $180 million. Collins said neither are fully invested.

In September, Summit sold its shareholding in Jamba AG, the German wireless content services provider, to Verisign, a Nasdaq-listed technology company, for $273 million.
Through its 12 funds, including three mezzanine debt funds, Summit has raised more than $9 billion. Founded in 1984, Summit Partners has invested in 270 companies, more than 200 of which have gone public or been exited through a merger or sale. In addition to Boston and London, the firm also has an office in Palo Alto.