Advent Eyes GBP100 Million For Second Venture LP

Advent Limited in May held a GBP45 million (ecu 67 million) first closing for Advent Private Equity Fund II (APEF II). A GBP7.5 million commitment from the European Investment Fund (EIF) – the largest investment by this vehicle to date – helped boost APEF II over its original first closing target of GBP40 million.

Advent now expects to take the new fund to its cap level of GBP100 million (ecu 150 million) by late summer.

Twelve institutional and family groups signed up at the first closing, and Advent has received expressions of interest in the fund from a further 25. Just over half the commitments to date have come from investors in Europe and the balance from North America. Susan Lloyd, formerly director of investor relations at Schroder Ventures, who is assisting Advent with marketing the fund, said Continental European commitments slightly exceeded UK contributions at the first closing, although Advent expects this balance to be reversed by the final close.

She added that a growing number of “significant” Continental institutions “without the baggage UK investors are still carrying from the 1980s” are developing an appetite for venture capital and demonstrating that they have a clear-cut investment agenda. At the same time, Susan Lloyd pointed out, more UK institutional investors recognise that they need to take a more organised approach to venture investing and are increasingly addressing the asset class either by establishing a dedicated team or by using external professional advisers.

APEF II’s profile was heightened at a June London venture conference hosted by Chancellor Gordon Brown, thanks to its high-technology focus and the involvement of the EIF. The fund will focus on Advent’s three principal areas of expertise: healthcare and life sciences; information technology, software and electronics; and industrial engineering and service companies. Although APEF II is destined primarily for investment in the UK, between 20% and 30% of the total raised is likely to be deployed in continental Europe. Typical investments will fall in the GBP2 million to GBP4 million range.

Director Jerry Benjamin said Advent has been developing a strong pipeline of investment opportunities in readiness for the fund’s first closing and predicted that several deals would be completed before the end of this year.

In the 17 years since Advent’s formation, its managed funds have backed more than 120 companies, 39 of which have achieved stock market quotations.

Earlier this year Advent, whose eight-strong executive team boasts more than 100 years of investment experience, succeeded in raising a second venture capital trust (VCT), closing it at its maximum level of GBP35 million. Advent 2 VCT will invest in smaller UK deals than APEF II.