Cadence has no more designs on Telos: Corporate VC unit to close

Telos Venture Partners has been shut down by sole limited partner Cadence Design Systems Inc. (Nasdaq: CDNS).

Its $100 million first fund (1995 vintage) has reached the end of its cycle, its $60 million second fund (2000 vintage) will be terminated at the end of 2006 and its $50 million third fund (2004 vintage) has been terminated.

Cadence launched Palo Alto, Calif.-based Telos to capitalize on the burgeoning venture market and, in particular, a growing interest in VC-backed semiconductor companies. It also maintained a more strategic in-house direct investment group, which has made around 19 investments.

The move to shut Telos came in mid-2005, when Cadence CEO Mike Fister ordered a strategic reevaluation to coincide with the pending end of TVP I. The company decided that it was no longer worth supporting an independent VC effort, and made its decision effective at year-end 2005.

“It just made more sense to narrow our focus to how we grow our business with strategic investments,” says Cadence CFO William Porter.

Porter adds that Telos General Partner Bruce Bourbon will manage TVP II until year-end, and that the firm’s other two partners – James Hogan and Charlie Huang – have already moved on to other endeavors.

The TVP website is still active, but its office phones have been disconnected.

Telos currently has 12 active portfolio companies.