NEW YORK – Newlight Associates LP expects a first close on approximately $100 million of soft-circled commitments for its $150 million-targeted Newlight Associates II LP in June, said Douglas Miscoll, a principal at the firm.
The fund, which launched in March, will back some 20 to 25 early-stage information technology companies, with a focus on Internet infrastructure, business-to-business e-commerce, software, communications and semiconductors, Miscoll said. The firm plans to invest between $2 million and $12 million in each company, over several rounds, with average total investments of $6 million.
Newlight reserves about 75% of its capital for companies based on the East Coast, and invests the remaining 25% on the West Coast. The firm is typically the first institutional backer of its portfolio companies, leading most deals and taking board seats, Miscoll said.
The firm’s previous vehicle, Newlight Associates LP, totaling just over $50 million, closed in April 1998 and is completely invested in 17 companies. The only thing that will change between the first fund and the second is the size of the investments, as the average investment in Fund I portfolio companies was $2 million, said Robert Raucci, a general partner at the firm.
The firm’s portfolio includes companies such as Destiny WebSoultions Inc., a builder of e-business products for the financial services industry based in Conshohocken, Pa., Web3000.com Inc., an Internet desktop marketing network based in Redmond, Wash., and Standard MEMS Inc., an integrated micro electro mechanical systems manufacturer located in Burlington, Mass.
Newlight’s limited partners consist of high-net-worth individuals, including entrepreneurs and executive directors of the firm’s portfolio companies, wealthy families from Europe, South America and the Middle East, and institutional investors including J.P. Morgan & Co. The firm expects most, if not all, of its existing limited partners to participate again and will add some newcomers.
The fund has an 80%/20% carried interest structure and a 2.5% management fee that decreases over the life of the fund and will average about 2% over time, Raucci said.
The firm has four investment professionals, Raucci, Miscoll, Managing Partner Robert Brill, and Special Partner Herman Fialkov.