EnerTech Capital Raises Second Fund –

WAYNE, Pa. – EnerTech Capital Partners is raising EnerTech Capital Partners II L.P., targeted at $150 million, double the size of its goal.

The venture firm invests in companies seeking to capitalize on the recent deregulation and convergence of the utilities, communications and energy industries. Launched in the early fall, Fund II held a first close in November on just less than $50 million (VCJ, January, page 40) and is expected to notch a second close in February before completing fund raising sometime in the spring, Lincoln said.

EnerTech plans to invest the latest vehicle in about 20 to 25 companies, mostly in the United States, but also in Europe and Australia. The firm will back each company with about $5 million over several rounds of financing.

EnerTech’s previous vehicle, the $50 million EnerTech Capital Partners L.P., which closed in August 1996, is completely invested in or committed to 14 companies, each of which received an average of $2.5 million. Its portfolio companies include VerticalNet Inc., an Internet-based business-to-business media company that held an initial public offering in February 1999, and Pack-West Telecom Inc., a telecommunications service provider that went public in November. The firm also predicts an IPO for its portfolio company Essential.com Inc., a Web-based provider of basic utilities and services to individual consumers and small businesses.

EnerTech expects some 80% of the second fund’s limited partners to be strategic investors such as utilities companies. Return LPs Safeguard Scientifics and Conectiv, will be joined by newcomers, including domestic and European institutional investors, Lincoln said.

“We consider the success we’ve had with the first EnerTech fund an amazing resource,” said Clark Phippen, of Conectiv’s corporate development unit, referring to the strategic partnership between the two. Conectiv already has committed $15 million to the second fund.

The firm’s four-person investment team – Managing Directors Lincoln, Scott Ungerer, Vice President James Biddle, and Venture Partner David Kelly – will expand, as EnerTech currently is in the market for another two to four investment professionals, Lincoln said.