BARTLESVILLE, Okla. – Eager to tap a market ripe with attractive, new venture funds, Knightsbridge Advisers Inc. in early March concluded fund raising for its latest fund-of-funds, Knightsbridge Integrated Holdings IV.
Knightsbridge’s third fund-of-funds, which closed on $102.3 million in September 1997, still has room for two or three more investments, but the firm did not want to risk being shut out of the abundant investment opportunities available, said Bradford Kelly, a Knightsbridge principal.
“The pace of opportunities has picked up,” Mr. Kelly said. “It gets hard [to keep up] when people come back to the market quickly.” The firm will invest two-thirds of Knightsbridge IV in early-stage venture capital partnerships and the remainder in post-venture capital public companies, which the firm considers a distinct, overlooked alternative asset class.
Explaining that 80% of a company’s wealth is created after going public, Knightsbridge Principal Joel Romines asked, “Isn’t there a great opportunity post-IPO?”
Most limited partners quickly sell their stock in a company after their general partners have distributed it, but Knightsbridge aims to buy more, with the hope that the company will develop into the next Microsoft Corp. or Oracle Corp. “In post-VC, you do not worry about capitalization,” Mr. Romines said. “Volatility is the long-term investor’s friend.”
Knightsbridge IV has held five rolling closes since March 1998 and has already committed to several partnerships, including Draper Fisher Jurvetson V, Sequoia Capital VIII and Institutional Venture Partners VIII.
The firm’s March 1999 close brings Knightsbridge IV’s total commitment to $190.5 million from among 22 institutional investors, such as U.K.-based Clerical Medical & General and Cooperative-Insurance Society, as well as New York-based Robert Wood Johnson Foundation. The fund-of-funds is backed by 60% European and 40% United States insurance companies, pensions, foundations and endowments.
While the fund is no longer soliciting new investors, one more limited partner might join the fund-of-funds by the end of March, bringing the vehicle’s total commitments to more than $200 million.
The firm in 1998 also raised a $100 million captive vehicle for Pensioenfonds PGGM, a Dutch health-care industry pension, raising the firm’s total capital under management to more than $750 million.
Messrs. Kelly and Romines, Principals Paul Fetsch and Rich Castleberry and Controller Joan Heidorn comprise Knightsbridge’s management team.