bmp, the German venture capital company, and Durlacher, the niche investment group, have announced that they have signed an agreement to create a strategic alliance. The reason for the alliance is that both companies espouse a similar research-driven approach to investment. And both have only a fairly recent history in this area.
Durlacher, for example, although its private client stockbroker roots go back to the 1930s, transformed itself into a niche investment house over the last five years. And bmp, which started life as a consultancy firm back in 1992, has been operating as a venture capital house since 1997. Initially active in Germany, bmp has now expanded across Europe, working in countries such as Austria, Czech Republic, Poland, Scandinavia, Spain, Switzerland and the UK.
In practical terms, this alliance will concentrate on the areas of life sciences, global computer and video games markets and application service providers. So far, the alliance has spawned only the creation of a 50:50 joint venture concentrating on the UK life sciences sector. This fund management team will be located in London but the venture has yet to be given a name.
Durlacher, which specialises in research and investment in new technologies and media, brings a knowledge of the UK market to the joint venture while bmp brings investment experience and knowledge of the life sciences (biotechnology, medical technology and nanotechnology). bmp will transfer this knowledge to the as yet unnamed joint venture company. Since 1999 bmp has been operating its life sciences business out of a subsidiary company called bmp Life Science AG. Aside from the life sciences, bmp also focuses on high-tech, specifically in the area of telecommunications, b2b, software, online media and entertainment and content.
When the UK life science research and investment company has been staffed it is expected to require between six to eight personnel and is in operation, both bmp and Durlacher will commit EURO10 million to the fund, which is expected to be invested on a co-investment basis within an 18 month horizon.
Both companies feel the life science markets offer tremendous potential over the coming years and that the UK benefits at present both from a strong domestic biotech market and from its current position as the most active venture capital market in Europe.
Talking of the wider strategic alliance beyond the life sciences initiative, Ralph Gunther at bmp says: “This alliance creates the first pan-European early-stage investment group that supports young technology companies from their incorporation through to stock exchange flotation in word and deed.”
Both parties feel their efforts will be enhanced by the co-operative agreement signed between management consultant Roland Berger & Partners and bmp in July this year. Roland Berger & Partners was founded in Germany in 1967 and since 1992 has focused on the strategic implications of information technology i.e., multimedia and commerce projects. The firm now has an international perspective with offices operating in 21 countries.
The UK life sciences joint venture is the only goal of bmp and Durlacher’s strategic alliance yet to be formalised. To date no announcements have been made regarding the intended joint activities in the global computer and video games market and application service providers, which draw primarily on Durlacher’s, rather than bmp’s, areas of expertise.
In the global computer and video games market, Durlacher is currently acquiring a portfolio of investments, and an existing internal project at Durlacher, called Games Investor, will provide the basis for an ongoing joint-investment relationship. Games Investor will leverage Durlacher’s games industry knowledge and its understanding of the associated networks, telecommunications and web industries that will play an increasing part in shaping the games industry’s continuing evolution.
And in the European Application Service Provider market, Durlacher’s recent creation of App-X will provide the blueprint for the partners to pool resources and extend geographic reach.