As corporations become slimmer models of their former selves, Pantheon Ventures is taking advantage of what is left behind. The buyout shop just completed an $11 million secondary purchase of Quantum Technology Ventures from Quantum Corp. and plans to make a habit of buying the corporate investment arms that are often shed when corporations pare down. To ensure Pantheon won’t miss an opportunity, the firm is also readying to raise Pantheon Global Secondary Fund II.
Pantheon Global Secondary Fund I, which closed on $418 million in 2000, is almost 75% invested. Fund-raising is expected to commence in the fourth quarter of this year or the first quarter of next year. While the new fund is still being thought out, Pantheon expects it to close with somewhere between $700 million and $800 million within six to nine months of when Pantheon hits the fund-raising trail. The fund plans to tap its previous investor base, but with the size of the fund being almost double of its last, there will be plenty of room left for new investors.
“A lot of firms undertook too much in the late 90s and now they are trying to get back to basics,” says Jay Pierrepont, managing director at Pantheon.
Under the deal’s structure, Quantum’s management team will focus on achieving liquidity for its portfolio investments over the next three years. Pantheon will supply the companies with follow-on money so it doesn’t get diluted during future rounds of financing. Quantum founded its VC unit in March 2000. At the time of the sale, the $100 million portfolio contained 18 companies in the storage, silicon, security and enterprise software sectors.