RADNOR, Pa. – Cross Atlantic Capital Partners Inc. has launched its inaugural Cross Atlantic Technology Fund, L.P., which is targeted at $150 million and will invest in the United States, the United Kingdom and Ireland.
The firm expected a first close on $50 million in October and a final close before the end of the year, said Glenn Rieger, a managing director of the fund.
Cross Atlantic will invest in about 25 early- to mid-stage information technology companies, with typical investments ranging between $2 million and $7 million each. The firm also will consider investing in telecommunications software and services, Internet, e-commerce, enterprise applications software and professional services.
Cross Atlantic decided to invest in the United Kingdom and Ireland to take advantage of the region’s venture capital opportunities. The firm expects to use 50% of the fund’s capital to back U.S. companies, with the remaining 50% being equally divided between companies in the U.K. and Ireland.
Cross Atlantic shares office space and has a working relationship with the Radnor, Pa. regional office of Silicon Valley Bank. It was through this relationship that the firm made its first U.S. commitment in September to GAIN Capital, an on-line trader of foreign exchange currencies.
The fund already made two investments in England at press time: Brainspark, an incubator/seed investor in Internet and e-commerce companies, and Zeus Technology, a Web server software company.
To gain access to Irish information technology companies, Cross Atlantic arranged to acquire a majority interest in The Crucible Corp., a seed- and early-stage fund in Dublin, Ireland. Through this relationship, the firm at press time had invested in two Irish businesses: Interactive Enterprise Ltd. and OpeNet Telecom Ltd.
Capital for the investments in England and Ireland, totaling more than $10 million, came from the firm’s four managing directors who are divided among three countries: Sheryl Daniels-Young is based in London; Gerry McCrory is located in Dublin; and Reiger and Caldwell are based in the Randor office.
Fund raising for the new vehicle began in the first quarter and kicked into high gear in March and April, when Managing Directors Reiger and Donald Caldwell, left Safeguard Scientifics Inc., an Internet-focused holding company, to form their own firm.
Reiger and Caldwell left Safeguard because the change gave them both an opportunity to be entrepreneurs once again, Reiger said. While at Safeguard, Reiger was senior vice president for business development and Caldwell was president and chief operating officer.
While at Safeguard the two men met McCrory and Daniels-Young, formed relationships to help provide proprietary deal flow and established contacts with limited partners.
“We have tried to position ourselves as a spin-out management team, rather than a first time fund,” Rieger said, “All in all, we’ve gotten a very good response [from investors], and we are quite confident that we will raise the complete $150 million. We couldn’t be happier with the progress.”
Pennsylvania State Employes’ Retirement System (PSERS), an L.P. in the fund, committed up to $50 million to the vehicle and Safeguard also committed an undisclosed sum. Other limited partners include a combination of institutional investors, banks and high-net-worth individuals.