OVP Venture Partners has held a second close on its latest fund, expanding it to $214.5 million, according to a recent regulatory filing. The new fund was expected to close at less than $250 million before the end of last year, Managing Partner Gerry Langeler told VCJ in early 2006.
The firm held a first close on OVP VII in May 2006, pulling in $204.5 million from 19 investors.
Return investors in the new fund include the Oregon Public Employees Retirement Fund (which committed $50 million) and the Washington State Investment Board ($40 million). New investors include GKM Generation Funds, the Alfred I. DuPont Testamentary Trust and the Olin College of Engineering.
OVP, which now has more than $700 million under management, invests in early stage life sciences and information technology companies mostly based in the Pacific Northwest. It also works closely with Microsoft Corp. (Nasdaq: MSFT) to get an early look at the software giant’s spinoffs.
The firm also monitors Intel Corp. (Nasdaq: INTC), which has a large research division stationed in Oregon. OVP Partner John Hull was previously with Intel Capital, serving as director of the $500 million Intel Communications Fund.
OVP is setting a fund-raising record despite losing limited partners who passed on its latest fund in favor of buyout and hedge funds. The firm lost two undisclosed LPs to alternative asset classes.
“One basically said, ‘We’re putting all of our money in hedge funds,’” Langeler says. He cites a change in that LP’s top investment management position for the shift in its investment strategy. The other lost LP passed up venture funds altogether in favor of more leveraged buyout shops. Langeler says that the investor got into venture in 1999 and had not been happy with its returns from the asset class.
In the last year, OVP has had two of its portfolio companies acquired, but at least one of them was for a price tag of less than half of what OVP and others had invested. OVP-backed email marketer @Once.com was acquired in January 2005 by InfoUSA (Nasdaq: IUSA) for $7.4 million. The startup had previouslu raised more than $17 million from OVP and an undisclosed partner.
OVP-backed chipmaker Airgo Networks was sold to Qualcomm (Nasdaq: QCOM) in December for an undisclosed amount. The startup had raised $144 million from OVP, Accel Partners, Blue Run Ventures, Oak Investment Partners and Sevin Rosen Funds. —Alexander Haislip