Scoop: M/C Ventures Will Seek New $500M+ Fund

Venture capital firm M/C Venture Partners, an early-stage investor in communications, IT, & media, will soon be courting LPs for its seventh fund, set to mirror recent prior vintages of about $550 million, according to a source.

M/C Ventures has not hired a placement agent for any of its prior six funds, the source said, but as the VC seeks to court international investors it is possible they will seek assistance fundraising.

The VC is mostly through its sixth fund, a 2006 vehicle that raised $550 million. The fund, which is about 75% deployed, will still make a handful of investments, the source said.

Some of M/C’s exits have been recent, and impressive, as well. Last December, listed, New York-based communications services firm PAETEC Holding Corp. spent $460 million and closed the deal to buy Cavalier Telephone, which the VC backed. In a deal where terms were not disclosed, M/C was among the sellers that dealt HyPerformix to CA Technologies, also last year. Other recent exits include the VC’s exit of its Fusepoint investment, a location provider, to Savvis, a data center operator, which was a $124.5 million sale for the company. M/C Ventures has also invested in Legendary Pictures, in 2005, the film production company that would go on to produce films including The Hangover, The Dark Knight and 300, among others.

M/C Ventures hasn’t exited all its winners yet, either. It continues to hold stakes in MetroPCS, Zayo Bandwidth and AccentHealth. It has not been a particularly busy year for M/C. As of Friday, the lone investment it announced was its participation in a $25.6 million round in PlumChoice, a tech services firm.

Looking back on past M/C Venture Partners funds, the VC may be counting on more impressive returns for its fifth fund as it looks to lure in LPs for its seventh go-round. M/C’s fourth fund, a $230 million 1999 vehicle, generated an IRR of -5.53% since its inception, according to CalSTRS data. Its fund from the following year, a $550 million fund, has generated an IRR of 7.5% to date, the pension’s data shows. However, this is from the fund’s most recent statistics, which were finalized at the end of September last year.

Data from M/C Venture Partners’ prior funds—pools No. 1 (a 1987 fund that raised $283 million), No. 2 ($167 million) and No. 3 (a $265 million pool)—were not available.

M/C Venture Partners declined to comment for this story.