Great Hill Notches $250M First Close –

BOSTON – Great Hill Partners, one of the two venture firms that last year spun out of Media/Communications Partners, in February held a $250 million first close for its inaugural fund. Great Hill has another $50 million in hard-circled commitments and likely will use rolling closes until the fund wraps, Managing General Partner Steve Gormley said.

The vehicle is aiming for $300 million and has a cap of $330 million, he added.

Limited partners include Chase Capital Partners, CIBC Oppenheimer, Finova, Yale University, the Crossroads Group, J.P. Morgan Asset Management, Fleet Equity Partners, Sovereign Financial Services Inc., Pennsylvania State Employes’ Retirement System, Venture Investment Associates and Williams College, Mr. Gormley said. All but two of the L.P.s that have invested in or committed to the fund have backed Media/Communication funds in the past, Mr. Gormley said.

Great Hill invests in later-stage durable media companies, as well as in information franchises, telecommunications and business services enterprises. M/C Venture Partners, the other Media/Communications spinout, focuses on early-stage telecommunications and information technology companies. M/C recently closed M/C Venture Partners IV on $230 million (story page 25). Media/Communications’s earlier funds remain under the management of all the senior investment professionals who transferred to M/C Venture Partners and Great Hill Partners.

Telling Their Story

Mr. Gormley said it was beneficial to have M/C Partners and Great Hill simultaneously market their funds, because it meant both teams were explaining to their L.P.s the reason for dividing Media/Communications Partners into two firms – to let each group concentrate on either early- or late-stage investments without having to raise a mega-fund to accommodate both approaches.

Mary Kelley, a managing principal at Sovereign, said her group was attracted to Great Hill because of the unique deal flow generated through its contacts and to its reputation as a quality firm in the media space. Sovereign was a limited partner in M/C Venture Partners II and III, but did not back M/C Venture Partners IV because Sovereign preferred Great Hill’s strategy, she said.

Ms. Kelley was not surprised by the firm’s split, describing it as “natural evolution.”

At press time, Great Hill was preparing to announce the addition of a new investment professional, and another is slated to begin working at the firm April 1.