Investors get in on the ACT

Dublin-based ACT Venture Capital has exceeded the IrGBP75 million (euro 95 million) target originally set for ACT 99, its second LP fund. Niall Carroll, ACT’s managing director, reports that six new investors have signed up to the fund since its GBP45 million March first close, taking the vehicle to between IrGBP80 million and IrGBP85 million (euro 101 million to euro 107 million).

Carroll, who names Access Capital Partners (story, page 6), Alpinvest and Clerical Medical as recent investors, confirms all six new participants are non-domestic institutions. Strong support from ACT’s existing domestic investors notwithstanding, the bulk of ACT 99 has been drawn from overseas, principally European, sources, underlining the attractions the market holds for foreign investors.

Ireland’s burgeoning economy has been the European success story of the 1990s and it is forecast to continue growing – albeit at the slightly reduced rate of six per cent per annum – for at least the next five years. During the past decade, the country, which produces proportionately more science graduates than any other economy in the developed world, has also emerged as a leading centre for high-tech, attracting high levels of inward investment.

Despite these strong fundamentals, few of the larger pan-European’ private equity funds are active in Ireland, focusing as they do primarily on the larger continental markets. Opportunities for private equity investors to access the potential returns Ireland offers have therefore been at a premium.

ACT Venture Capital, formerly AIB’s unquoted investment arm, assumed independent status in 1994 and is Ireland’s largest private equity operation. Its senior management team has a track record extending back more than 14 years, and the group benefits from an established and extensive network that channels deal flow from companies at all stages of development.

Like its IrGBP350 million 1994-vintage predecessor, ACT 99 will build a balanced portfolio encompassing venture, development capital and buyout situations. Reflecting the current quality of technology-based investment opportunities in Ireland, the managers expect the new fund’s portfolio will include a higher percentage of technology-based investments than ACT 94, while maintaining a prudent level of diversification. Except in the case of buyouts, where ACT 99 will seek a controlling interest, ACT 99 will normally acquire minority shareholdings.

The new fund represents the latest extension of Alpinvest’s international network of affiliations, following the Dutch group’s establishment of a relationship with Excel Partners in Spain last year. Where appropriate, ACT intends to offer co-investment opportunities both to Alpinvest and other LPs in the new vehicle.

Carroll says ACT 99 remains open for commitments and predicts that the fund’s capital could still increase by a further five to ten per cent.