Industry Ventures Closes $265 Million Fund V
Oversubscribed Secondary Fund Focused on Venture Capital Increases Fund Size
SAN FRANCISCO – March 23, 2009 — Industry Ventures L.L.C., a leading secondary firm focused on acquiring venture portfolios, limited partnership interests and other private equity investments, today announced the close of its oversubscribed fifth fund, Industry Ventures Fund V, L.P. with $265 million in committed capital from over twenty institutional investors. Originally targeting $200 million, the firm was granted approval by its limited partners to increase its fund size due to investor demand and overall market growth. Industry Ventures will actively deploy the new capital in the secondary market consistent with its previous strategy focused on acquiring positions in high quality venture backed companies through positions in venture capital funds and secondary direct transactions.
“The strength of the secondary market is one of the few bright spots in these challenging economic times,” said Hans Swildens, principal and founder of Industry Ventures. “As markets dried up in 2008 and the global financial crisis spread, we began to see a proliferation of diverse sellers in the market as the need for early liquidity increased. This increased deal flow coupled with the secondary market’s unique ability to steadily deploy capital resulted in significant investor demand and an oversubscribed fund that was larger than originally intended.”
In 2008, Industry Ventures completed over 40 acquisitions — which included secondary direct investments in private companies and limited partner interests — compared to 27 acquisitions the previous year. Some of the transactions involved the nation’s high-profile venture-capital funds, as well as successful growth stage private companies, said Swildens.
“Since last quarter, we have seen the volume of secondary deals grow more than 25% and we estimate there is more than $5 billion for sale in the secondary venture capital market. This vibrant market is providing an important liquidity option for entrepreneurs, sellers of venture funds and financial institutions and is contributing to the stabilization of the venture capital and financial markets,” concluded Swildens.
Industry Ventures is planning to invest its Fund V over a period of two to three years through new acquisitions of direct investments and limited partnership interests typically ranging in size from $1 million to $25 million each. The firm also has a co-investment capability in Fund V that enables the firm to acquire larger special situation transactions with its limited partners larger than $25 million in size.