It’s a little older and a little fatter than initially anticipated, but it’s finally over.
Last week, Advent International announced that it had recently held a final close on Digital Media & Communications III (DMC III), a full six months after the early-stage vehicle had originally been slated to finish fund-raising. The firm also revealed that DCM III had busted its $300 million target capitalization and finished up with $345 million.
“What basically happened was that a little over a year ago we began warehousing commitments from existing corporate investors and then went out cautiously to the broader market,” said Andrew Fillat, managing director with Advent International. “We did most of the fund raising in the second and third quarters.”
He added that one of the main reasons for the slowdown was Advent’s decision to do more than simply re-up investors from the $70 million DMC II. Such a stance became increasingly difficult as the public markets tanked and non-corporate asset managers began being bombarded with more established billion dollar offerings.
Therefore, Boston-based Advent went global targeting non-U.S. limited partners by hyping both its European ground presence and plan to pump approximately one-third of DMC III’s capital into European companies.
“We successfully differentiated ourselves from other funds over there by pointing out that we didn’t need to hire a team in the U.S. and fly them out to London, they’re already there,” Fillat said.
Moreover, the firm’s existing corporate LP base proved to be an invaluable asset when it came to establishing early-stage credibility for an investment firm known for its later-stage activities.
Among the non-corporate investors Advent signed up were a Dutch pension fund and an affiliate fund of the Government of Singapore. On the corporate side, the firm received commitments from Asahi Glass Co., BellSouth Corp., Hughes Electronics Corp., MasterCard International Inc., The McGraw Hill Companies, NTT doCoMo Inc., Omron Corp., Royal KPN, Samsung Venture Investment Co., Telecom New Zealand, Tokyo Electric Power Co. Inc., Toshiba Corp. and Tyco Ventures.
Neither Novell Inc. nor Sonera Corp. both DMC II investors chose to participate in the more recent offering. For Novell, the decision was based in allocation limitations, while Sonera had set up its own internal venturing program and decided not to spend its money on third party efforts.
Focused on telecom-related investments, the new fund has thus far committed approximately 15% of its available capital.
Just last week, the firm was expected to close on a venture deal for Redfern Integrated Optics, an Australian firm that is in the midst of building up its U.S. operations.
“[Redfern] lays down optical materials on silicon wafers using a low-temperature method so that the capacity to lay down silicon circuitry is not destroyed,” Fillat said.
Dan Primack can be contacted at Story Feedback.