VCIt missed its original target by $150 million, but Carlyle Venture Partners still closed the largest venture capital fund of this year with $600 million Carlyle Venture Partners II.
While Carlyle’s first venture fund was driven by early-stage deals, its newest fund will invest more in expansion and later-stage rounds. “In the first fund, the majority of companies were early-stage, but that was a function of the price environment at the time,” says Robert Grady, Carlyle Venture Partners’ managing partner in San Francisco. “When you would see a $300 million or $400 million pre-money valuation on a later stage deal, it wasn’t attractive. What we’re seeing now is … later-stage deals at early-stage prices.”
CVP II fund will invest about $10 million per deal and reserve a similar amount for follow-on rounds. Over a four- to five-year cycle, it will take stakes in 30 to 40 companies. Already, the fund has committed about $100 million into 12 deals-all but one is a later-stage deal.
Its target sectors are enterprise infrastructure applications like network security and storage, defense technologies, software and specialty semiconductors.
The new fund marks the first time Carlyle’s venture group has gone after institutional investors: About 80% of the fund’s capital comes from public pension funds, corporate pension funds and endowments.