Partially defeated by the economic doldrums, Allegis Capital recently revealed that it has decided to exit the fund-raising trenches with just half of the commitments it originally sought for its fourth investment vehicle.
Initially slated to close in March with a target of $400 million, Media Technology Ventures IV (MTV IV) instead will hold its final close in late August with just $200 million worth of new money in its coffers. That capital has already been committed, but since the firm is technically still allowed to fund-raise for the next two months, MTV IV?s target could reach $250 million when all is said and done, said Barry Weinman, a managing director with Allegis Capital.
“The reality is that weather conditions deteriorated a bit out there earlier in the year,” Weinman explained. “We stopped fund-raising for a while, and focused back on our portfolio, which needed a little help. [Then] we lashed ourselves to the mast and now have tacked into the wind and we?re getting ready for final close. The weather?s looking a little better, but it?s still a little rough out there, so we set our expectations slightly lower.”
Although the firm opted to approach institutional backers for the first time with MTV IV, the decision to broaden its LP base had no impact on the end result as the fund received a relatively warm reception from new investors, he added.
While Weinman was unable to provide specific names, he did say that they included government funds from two different Asian countries, wealthy family foundations from Europe and union pension funds. The firm?s existing LP roster, which reads like a who?s-who of corporate investors, includes American Express Co., The Boeing Co. Sun Microsystems Inc., Eastman Kodak Co., Singapore Technologies Ltd., Fujitsu and Motorola Inc.
The firm plans to invest the new capital from MTV IV alongside the approximately $200 million of dry powder it has left over from its previous funds, giving it enough capital for the next 18 to 36 months.
“We thought [that money] would be invested by now, but we have slowed our investment pace dramatically,” Weinman explained.
Still, the firm will likely begin investing again later this year in mostly early-stage deals. Moreover, Allegis Capital plans to return to its technology roots, investing less in pure media investments than it has in the past few years, and more in semiconductor, optical components, wireless and broadband plays.
Allegis will also turn some of its sights to Asia in order to pursue deal flow and leverage the speed at which technology is developed and adopted there.
Despite falling short of its original target, MTV IV is still Allegis Capital?s largest fund to date. Vintaged in 1999, the $170 million MTV III is a close second.
Contact Robyn Kurdek: Robyn.Kurdek@tfn.com