GENEVA – Index Ventures I, a maiden vehicle launched in September, at press time expected a $62.5 million second close and hired NationsBank Montgomery Securities as a placement agent to guide fund raising to a final wrap in March.
The latest close follows a $40.5 million first close in late November, said General Partner Neil Rimer. Limited partners include Cisco Systems Inc., Bank Vontobel’s Private Equity Holdings, Liechtenstein Global Trust, Swiss insurance company La Baloise, Pictat & Co.’s Unicapital Investments, Unigestion and Swiss money manager Faisal Finance, among others.
The final L.P. lineup is expected to be a fairly even split between United States and European institutions, funds-of-funds, insurance companies and banks.
The hiring of a placement agent will help the first-time vehicle establish credibility in the North American market, Mr. Rimer said. “[Fund raising is] a grueling process,” he explained. NationsBank will lend its name and organizational expertise to help arrange meetings and trips, thus paving the way for Mr. Rimer and his partner, Giuseppe Zocco, to begin scrutinizing deals.
The anticipated March final close is targeted at $100 million, with a $150 million cap.
Although the firm did not use a placement agent for its first close, its partners considered fund raising a notable success. “We were really pleased,” Mr. Rimer said. “You don’t hear about [first time funds] going from a private placement memorandum to a first close in three months.”
Index primarily will focus on the European information technology and life sciences markets, including telecommunications, data communications, Internet, e-commerce, enterprise software, genomics, drug delivery and pharmaceuticals. However, 20% to 25% of the fund will be invested in U.S. deals.
Seventy-five percent of the fund will concentrate on later-stage investments, while the remainder is slated for earlier rounds. “Ideally, we would like to be the last round of private money in a company before an IPO,” Mr. Rimer said, explaining that there are many private European companies that already could have gone public in the U.S.
As the European venture market continues to mature, Mr. Rimer expects the firm’s next vehicle to be focused on earlier-stage companies.
Based on a $100 million wrap, Mr. Rimer expects the fund to make 14 or 15 investments of between $5 million and $7.5 million each.