Munich-based early-stage investor Wellington Partners has posted a first closing of its Wellington Partners III Technology Fund (WP III Tech) on €85 million ($114 million). In a statement, Wellington said it has a further €25 million of commitments, which will contribute to an intended final closing of at least €120 million in 2005.
Wellington said investors in the fund so far include: Access Capital Partners; AlpInvest; Lexington Partners; Swiss Re; the European Investment Fund (EIF); VCM; and von Braun & Schreiber.
The fundraising is being advised by London-based placement agent MVision and the Munich office of international law firm SJ Berwin.
Last week, London-based venture capital firm Advent Venture Partners announced the first closing of its latest fund on £128 million as it seeks to reach a £200 million target. Together with Wellington’s experience, this suggests there is still a ready supply of capital for European venture – despite the harsh conditions for investment over the last few years.
However, both fundraisings also suggest that the target size of funds is being set at pragmatic levels. Advent’s previous fund closed on £300 million, while Wellington’s Wellington II fund, the predecessor to the latest effort, closed on €210 million in June 2000.
Wellington partner Frank Boehnke is upbeat regarding prospects for investment at the current time: “Virtually never before in Wellington’s 14-year history has there been a time when we had the opportunity to invest in first-class companies, led by seasoned management teams, at the kind of relatively low valuations seen today,” he said.
Wellington said the latest fund would start investing in January 2005 in five areas of technology: applied materials, communications solutions, enterprise software, infrastructure and media. The firm will invest up to €10 million in European high-growth companies with the aim of rapid expansion, possibly into the US and Asia.
Formed in 1991, Wellington Partners manages total fund volume of €350 million. It has invested in over 70 companies and says it has sold 21 of them at a profit, in four cases through an IPO. The firm claims an internal rate of return on its 1998-vintage Wellington I fund of 54 percent net to investors.