Bessemer closes seventh fund

Bessemer Venture Partners (BVP) recently closed on $1.2 billion for its seventh fund, after adding some new limited partner commitments and letting its largest LP, Bessemer Securities, transfer part of its original stake in the fund.

The fund in question is Bessemer Venture Partners VII, which closed in June 2007 with about $1.1 billion in capital commitments. It was the first BVP fund open to institutions other than Bessemer Securities (which BVP spun out of), although the family office still took a very large stake. It turned out to be too large a stake. Sources say that Bessemer Securities unloaded $250 million of its commitment to the fund to other limited partners. They noted that Bessemer Securities retains a sizable position, but declined to be more specific.

Besides the transfer of fund commitments, Bessemer VII also picked up an extra $100 million in new commitments form undisclosed LPs, brining the fund total to $1.2 billion.

A BVP spokesperson declined to comment.

BVP limited partners say that Bessemer Securities’ decision to sell part of its stake isn’t a vote of no confidence in BVP. Instead, it’s viewed as a reflection of liquidity issues running rampant through the LP community.

“This is an excellent group [at BVP]—good people who don’t drink their own bath water,” says one investor.

The investor also acknowledges that $1.2 billion is a large fund size, but adds that BVP does all of its deals—in early stage companies, growth investments and India-based deals—from a single pool. Other VC firms, with a similar broad focus have just as much capital, he says, but they tend to have their funds broken into separate pools. —Dan PrimackDEALWATCH: Five recent investments by Bessemer Venture Partners

Cornerstone OnDemand Inc._Talent management software

Goodmail Systems Inc._Email certification platform

Sarovar Hotels & Resorts_Hotel chain in India

SonicMule Inc._Interactive sonic apps for iPhone

Yodle Inc._Online lead generation marketing for small businesses

Note: Investments made in January and February 2009. Sources: Thomson Reuters