Munich headquartered venture capital house PolyTechnos Venture Partners has decided to raise two dedicated funds, signalling a move away from the traditional hybrid structure it has previously pursued.
Founding partner Dirk Kanngiesser said: “Asset allocation in European VC has changed over the years, from geographically-focused to sector-defined allocations. In order to address this change, we are offering separate vehicles for IT and life science, while maintaining co-location of the respective teams in order to ensure know-how transfer in deals that involve both disciplines.”
The new IT fund will operate under the name PTVF III with the name for the life sciences vehicle to be revealed shortly. The management of the previous two funds will be an unaffected by the change.The firm closed its first fund, Enabling Technology Limited Partnership, in 1999 on €65m and closed its second, PTVF II, on €130m in February 2003.
PolyTechnos’ move to a separate fund strategy is a growing trend in European venture capital, especially it seems in Germany. Fellow inhabitants of Munich TVM Capital raised its last hybrid fund in 2000 and last year closed TVM Life Science Ventures VI on €240.3m. Wellington Partners decided in the summer of 2004 to split life sciences and technology into two separate funds and raised €150m for its first tech-only fund in July 2005, €30m over target.
One of the big drivers behind such a development is the attitude of LPs. Investors want more control in the modern VC world over where exactly they allocate their funds. By offering two distinct funds with two management teams, it enables the firm to meet such a demand.