Venture Capital News
Advent International Closes Third Latin American Fund at $375 Million
Representatives of Advent International, the global private equity firm, announced the final close of its Latin American Private Equity Fund III (LAPEF III) at the hard cap of $375 million. The fund attracted a high level of investor interest well beyond the cap. LAPEF III is the largest private equity fund raised in Latin America in the last five years and Advent’s third since entering the region in early 1996. It is also the third buyout fund closed this year by Advent, bringing the total capital raised in 2005 to more than $4 billion.
Like its predecessor funds, LAPEF III will focus on buyouts of growth companies across Latin America, with a particular emphasis on service businesses, including business outsourcing, travel and airport-related services and financial services. The fund will target the three largest economies in the region – Mexico, Brazil and Argentina – investing up to $50 million of equity in companies in primarily control positions.
The success of LAPEF III reflects Advent’s leading position in the region and the increasing interest in Latin America among institutional investors. Advent is the largest regional private equity firm by size of team and capital managed and has a 10-year history of investment in Latin America.
Latin America 's major economies are experiencing a period of overall economic stability, leading to increased infrastructure development and corporate growth. The influence of global markets has triggered both the emergence of new industries, such as business outsourcing and new financial services, and consolidation of more established ones, such as media and information technology. Companies looking to expand internationally now have easier access to the region, improving the pool of trade buyers for strategically positioned local businesses.
Over the last decade, Advent has invested in 28 Latin American companies with a combined enterprise value exceeding $1.3 billion. Eight of these companies have been acquired by strategic or financial buyers. The team of 18 investment professionals is the largest in the region, operating from wholly owned offices in Mexico City, São Paulo and Buenos Aires. The new fund brings Advent’s total capital managed in Latin America to $870 million.
LAPEF III received strong support from existing limited partners, with virtually all of the LAPEF II investors active in private equity committing to the new fund. These institutions were joined by a number of new investors, who provided roughly half the fund’s capital. Investors include public pension funds, representing 43% of committed capital, funds of funds (15%), corporate pension funds (13%), banks (12%), insurance companies (9%) and government institutions (6%).
Fifty-three percent of the capital was raised from North American investors, with 36% coming from Europe and 11% from the Middle East and Asia Pacific. Some of the largest North American investors include California Public Employees’ Retirement System, Morgan Stanley Alternative Investment Partners and British Columbia Investment Management Corporation. Among the European investors are AlpInvest Partners, DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH) and FMO (Netherlands Development Finance Company).
With a robust pipeline of deals in the region, LAPEF III has already made its first two investments: the acquisition (subject to Central Bank approval) of Nuevo Banco Comercial, Uruguay’s largest commercial bank, and purchase of a majority stake in Hipotecaria Casa Mexicana, a specialized mortgage lending institution in Mexico. Advent expects to close a third investment by the end of the year.
The new fund follows two other successful fund-raising efforts by Advent this year. In April, the firm had a final closing on GPE V, a €2.5 billion ($3.3 billion) fund investing in mid- to large-market buyouts in Western Europe and North America. The same month, Advent closed ACEE III, a €330 million fund investing in mid-market buyouts in Central and Eastern Europe. LAPEF III also builds on a series of Latin American buyout funds managed by Advent, including LAPEF I, formed in 1996 with capital of $230 million, and LAPEF II ($265 million), raised in 2002.
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Sierra Invests in China
Representatives of Sierra Ventures, a Silicon Valley venture firm with US$1.1 billion in committed capital, said this week it made its first investment in China through Gobi Partners, a Shanghai-based venture capital firm focused on early-stage technology companies.
The amount of the investment was not disclosed. But the investment—Sierra’s first as a limited partner in another fund—helped Gobi Partners boost the size of its fund to $50 million.
International Business Machines, NTT DoCoMo, and The McGraw-Hill Companies joined Sierra as co-investors in the fund, which will funnel its cash into information technology, internet, wireless, and digital media companies.
Keeping a finger on the pulse of what’s happening in the Chinese market will help Sierra make better investment decisions in the U.S. and better serve the half dozen or so of its portfolio companies that have operations in China, said Sierra founder Peter Wendell.
Gobi , founded in 2002 by Wai Kit Lau, Thomas G. Tsao, and Lawrence Tse, has already made several investments. Its portfolio companies include Digital Media Group, which operates digital media networks in China’s subway systems, and Lingtu, a digital-mapping and location-based services provider.
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Austin Logistics Closes $8 Million Series B Funding Round
Representatives of Austin Logistics Inc., a leading provider of predictive analytics and business intelligence software solutions, announced that the company completed an US$8 million Series B financing round. The funding round was led by Total Technology Ventures with additional financing support from existing investors, including Baird Venture Partners, Apex Venture Partners, Svoboda, Collins L.L.C., and North Hill Ventures. The new capital infusion will be used by Austin Logistics to continue the company's business success, which includes a nearly 100 percent jump in sales over the past 12 months.
In addition to securing its recent funding round, Austin Logistics also announced that Tom Smith, managing partner, Total Technology Ventures, has joined the company's board of directors. Other board members include Daniel Duncan, president and CEO of Austin Logistics; William J. Filip, partner, Baird Venture Partners; Lon H. H. Chow, general partner, Apex Venture Partners; Norman A. Willox, Jr., chief officer for Privacy, Industry and Regulatory Affairs, LexisNexis; and R. Michael Allen, president and CEO, RMA Associates.
Since its last funding round in 2004, Austin Logistics has achieved numerous milestones. The company entered the telecom market through new customer deals with companies such as BellSouth. Austin Logistics also expanded distribution in South America, Europe and Asia with new distribution partnerships, as well as entered the Chinese market through its ongoing strategic partnership with First Data Corp. In addition, the company quadrupled its office space by moving its corporate headquarters to a new location at 2901 Via Fortuna in Austin, Texas. The new space is in support of a doubling of company staff over the past 12 months.
Austin Logistics' innovative predictive analytics and business intelligence software solutions enable organizations to make proactive profit-focused decisions that optimize actions in key decision areas, including collections, risk & fraud, marketing and customer service. Austin Logistics solutions are deployed by companies across a wide range of financial services, including credit cards, auto loans, mortgages, direct deposit accounts, and consumer finance as well as in e-commerce and telecom.
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Judge Clears Way for Sale of Assets of Manitoba's Crocus Fund
A judge in Manitoba, Canada has cleared the way for the sale of the assets of the labor-sponsored Crocus Investment Fund over five years.
Receiver Deloitte & Touche can sell the assets of the fund, which has been halted for trading since December, Deborah McCawley ruled.
McCawley turned down a proposal from the Manitoba Federation of Labor, which wanted the court to work with a Vancouver-based company called Growthworks Venture Capital, and have that company appointed as manager of the fund.
Deloitte & Touche has said it wants to offer the fund's 34,000 shareholders an interim payout of about 70 cents per share - less than a tenth of their value when trading was halted.
McCawley issued a ruling last week authorizing Deloitte & Touche to co-operate with the RCMP ( Royal Canadian Mounted Police) in an investigation of the Crocus Fund.
The RCMP have said little about their investigation.
Some 34,000 Manitobans have more than $150 million invested in Crocus, a labour-sponsored venture-capital fund with a mandate to invest in Manitoba companies.
Trading of Crocus shares halted in December 2004 amid fears they were over-valued. Provincial auditor Jon Singleton confirmed those fears this year in a scathing audit that criticized the fund's management and operations.
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Thames River Hires Fund Manager
Representatives from London’s Thames River Capital announced that Nic Karageorgis has joined its fast growing Multi-Manager Hedge Fund team as an assistant fund manager responsible for investment risk. Nic joins from Spyre Asset Management, the Fund of Hedge Funds business of the Abbey group.
