LONDON – As information delivery reorients to a digital infrastructure, how will content be valued?
The partners at ProVen Private Equity Ltd. are bullish on content becoming king of the digital market. To that end, the London-based investment firm is raising as much as $250 million to invest in intellectual properties through Global Rights Fund II. The firm, which recently established a satellite office in New York, expects to close on at least $50 million by the end of the first quarter.
“The business of brands and content provide long running revenue streams,” said Gordon Power, chief executive of ProVen. “Given the amount of money invested by technology funds in creating the pipeline, it will be particularly important for these companies to exploit their materials.”
ProVen’s first $20 million intellectual property fund closed in 1994 and has been fully invested for more than one year. To date, the fund has a 57% internal rate of return. ProVen portfolio companies include Virgin Records Ltd. Independent Research Services Ltd., a direct marketer and educational publisher, and Integrated Solutions Technology Ltd., a new media company.
Power said he expects existing limited partners to account for two-thirds of the fund, which has a 80%/20% carried interest split and a 2.25% management fee. ProVen has established strategic relationships with United News & Media plc, Sony Music Entertainment Inc. and Standard Life Assurance Co.
While the majority of investments are expected to be in U.S.-based companies, Power said the firm would scour the globe for the next Pokemon. Five investment professionals are managing the fund, including one Los Angeles-based partner, former Mattel Inc. Chief Strategy Officer Doug Glen. ProVen will invest $3 million to $5 million in a portfolio company’s first round, with no individual commitment exceeding more than 10% of the fund.
On another front, ProVen recently closed its $54 million Investcare fund, which targets early-stage companies in the health-care industry.