CINCINNATI – Blue Chip Venture Co. plans an April close on the $150 million Blue Chip Capital Fund III L.P.
The fund will invest in roughly 25 companies with an individual average investment of $6 million, said General Partner John Wyant. Blue Chip III’s minimum investment will be $2 million and no investment will exceed $15 million, he said. Co-investments by limited partners will not be permitted.
Information technology companies, mostly Internet-related, will collect 40% of the fund, while health-care companies will attract 30% of Blue Chip III’s capital. Some 20% of the remaining capital will be allocated to consumer and retail companies and 10% to light industrial companies.
Mr. Wyant said 55% of Blue Chip’s portfolio companies will be located within a 300-mile radius of Cincinnati.
While Blue Chip will not invest seed money, 55% of the fund will be allocated to early-stage companies. Mr. Wyant said 25% of the fund will be devoted to expansion-stage companies, and the remainder of the fund will be invested in mature, later-stage companies. Blue Chip will not invest in public companies.
Limited partners from Blue Chip’s previous funds are expected to return for Blue Chip III.
“Blue Chip II had 96% of the investors from Blue Chip I,” Mr. Wyant said. “Our understanding is that it will be a similar crossover from [Fund] II to III.”
Pension funds will put up 50% of Blue Chip III, while banks, insurance companies and other corporations will invest 30% of the fund with the balance coming from high-net-worth individuals.
Blue Chip III has a 2.25% management fee.