Ascent Seeks $125M For Inaugural Fund –

BOSTON – Ascent Venture Management Inc. in mid-May began raising its first fund since spinning out from the Pioneer Group earlier this year (VCJ, March, page 5).

Targeted at $125 million, Ascent Venture Partners III, L.P. was named to reflect the management team’s experience in running two prior funds under the Pioneer banner.

The team began soliciting capital from Pioneer’s limited partners, who were so enthusiastic about the new fund that they asked to commit more than twice the amount of capital that went into Pioneer’s prior vehicle, said Managing Director Leigh Michl.

The fund likely will reach a first close in July, and fund raising will be completed by the end of the year, he said, declining to say how much money had been committed by press time.

Mr. Michl thought investors would be somewhat confused by the group’s departure from the Pioneer fold, but it did not become a major issue. “A lot of people were aware of the spin-off, and there really has not been much confusion,” he said.

Pioneer, which manages mutual funds and institutional investments, gave up private equity investing. In doing so, the firm sold its holdings in three venture funds raised under its name to Landmark Partners Inc. (VCJ, May, page 5). The Ascent team – Walter Dick, Christopher Lynch, Frank Polestra and Mr. Michl – will continue to manage the old and new vehicles. The Pioneer funds – Pioneer Capital Corp., Pioneer Venture Partners and Pioneer Ventures L.P. II – add some $100 million to Ascent’s capital under management, Mr. Michl said.

Investors in Ascent III mainly comprise pensions and individuals, including venture capitalists and entrepreneurs Pioneer backed with its earlier funds. Mr. Michl said. Most limited partners are domestic, and the average commitment has been about $4 million.

Ascent will seek to expand its investor base beyond existing Pioneer L.P.s, and the firm will reach out to institutions that tried, but failed, to gain entry into Pioneer funds, he said.

Ascent III features an 80%/20% carried interest split and a 2.25% management fee that declines in the later years of the fund’s life. Mr. Michl said the firm’s previous funds featured a 2.5% management fee, but the fee was lowered because of the larger size of the new fund.