DENVER – Denver-based Centennial Funds in May held a $307.5 million close on Centennial Fund VI L.P., exceeding its $300 million target.
Launched in January, Fund VI is expected to hold a final close in July at $400 million, nearly doubling the size of the $221 million Centennial V, which closed in February 1997.
“We went through an analysis with Fund V showing that we could have deployed $400 million in those companies,” said Donald Parsons, a managing principal of the fund. “The goal is to raise enough money to play an impact role in start-up companies without breaking our investment strategy.”
New limited partners in the fund include Carnegie Mellon University, General Electric Capital Corp., Washington University, First Union Capital Corp. and DLJ Equity Funds.
Existing limited partners that ponied up again include Public Employees’ Retirement Association of Colorado, HarbourVest Partners, The Ford Foundation, PNC Venture Corp., Pew Charitable Trusts, Chase Capital Partners and Houston Firefighters’ Relief and Retirement Fund.
The firm retained Donaldson, Lufkin & Jenrette Inc. as placement agent, as it did for Fund V in 1996.
Centennial Fund V had 18 portfolio companies, and Mr. Parsons said the firm expects to invest in a similar number of companies with the new fund while increasing the total commitment to each portfolio company to as much as $25 million from the $15 million put behind Fund V companies
Since the $236.5 million first close of Fund VI last month, the firm has made two investments – a follow-on in Via Networks, a Fund V portfolio company, and a small investment in COspace, a Boston-based telecommunications service outsourcing company.
Continuing its focus on the communications sector, Centennial identified four broad areas within that arena that will be focal points for investment – infrastructure and outsourced services, broadband last mile services, Internet-enabled services and electronic technology and software.
Mr. Parsons said that within Internet-enabled services, the fund supports efforts akin to CenCom V Sourcing, a business accelerator that includes Bell Canada, Nortel, Matsushita, Vanguard Ventures, North Point Ventures and Centennial (story page 14). “I expect most, if not all of the technology companies to be in cooperation with [CenCom],” Mr. Parsons said.