PHILADELPHIA – Liberty Venture Partners is raising its second fund, Liberty Ventures II LP, targeted between $100 million and $150 million, said David Robkin, a principal at the firm. Liberty held a first close in December 1999 on $35 million and plans to have another interim close before the final, expected in September, he said.
The firm will invest the fund in as many as 30 early and expansion-stage Internet, information technology, telecommunications and health-care companies. Although Liberty is focused on companies based in the mid-Atlantic region, the firm is willing to invest across the U.S., Robkin said. The firm will back each of its portfolio companies with between $3 million and $7 million, over several rounds of financing, he said.
Liberty’s first fund, the $50 million Liberty Ventures I LP, which closed in 1996, is invested in some 14 companies, and will make another five or six investments before it is completely committed. Fund I is a Small Business Investment Company, and as such, received two-to-one equity leverage from the Small Business Administration. Net returns for the first fund are in excess of 90%, Robkin said.
The firm’s portfolio includes U.S. Wireless Corp., a San Ramon, Calif.-based provider of wireless location information, and Requisite Technology Inc., a supplier of e-commerce product and service information, based in Westminster, Colo. and Shelton, Conn.
To increase deal flow, Liberty partnered with Janney Montgomery Scott Inc., a Philadelphia-based brokerage firm, and Commerce Bancorp, a financial services retailer headquartered in Cherry Hill, N.J., both of which will be members of the general partner, as well as limited partners in the firm. In addition to deals, the relationship gives Liberty access to the back-end services both financial institutions have to offer. In return, the financial firms will benefit from an undisclosed portion of the carry above the 80% to which all limited partners in the fund agreed.
The firm’s other investors include a mix of private holding companies, high-net-worth individuals and institutional investors. Most of the firm’s limited partners from the first fund plan to join the second vehicle, Robkin said.
Liberty’s three principals are Thomas Morse, Karen Griffith Gryga and Robkin. The firm recently tapped an analyst and is in the market for an associate. Liberty also plans to hire a principal with experience in telecommunications in time to invest the new vehicle, Robkin said.