PALO ALTO, Calif. – Already one of the most popular names in the public equity arena, Lucent Technologies Inc. in March announced plans to keep its brand viable on the private side by pumping $150 million into wholly-owned subsidiary Lucent Venture Partners (LVP).
The cash infusion, which Lucent executives had been planning for months, is the financial backbone behind the recently formed fund Lucent Venture Partners II (LVP II). The corporate venture arm’s first fund, the $100 million LVP I, found itself fully committed this past December. LVP I does have a small amount of available capital remaining but that money has been designated for future investments in the fund’s 22 portfolio companies.
“We’ve been very fortunate in that we haven’t had any negative valuations or down rounds on our portfolio companies from the first fund,” said John Hanley, president and managing partner at LVP. “We got in on most of those companies at the early-stage, pre-beta level, so there was clearly a good bit of risk, but we are very pleased with how things have turned out.”
As such, Hanley and his team plan to follow the same strategy with its second fund. What this means is that LVP II will invest in early-stage tech companies that hopefully can provide some sort of strategic value to the parent company, as well as strong financial returns.
Since LVP II is a corporately-funded vehicle that did not need to go through an outside marketing process, the fund has moved fast with three investments already under its hat. Hanley would not identify the new Lucent portfolio companies, but he did say the total investment in the three firms came out to around $9 million. He added that two additional deal closings are imminent.
LVP does not have any current plans to hire additional partners to help manage the new fund.