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Capital Stage predicts big returns from nanotech

Capital Stage, a German financial services firm, has launched Europe’s first investment company dedicated to nanotechnoloy investments. Capital Stage will commit EURO20 million to the EURO100 million Nanotech Invest aims to raise.

The firm began looking at the viability of investing in nanotechnology in spring 2000. Dr Berndt Samsinger, leading the Nanotech Invest team and also a member of the executive board of Capital Stage, said: “Nanotechnology is not a technology but a platform to produce new products, it’s very broad.”

Capital Stage believes it is an excellent time to invest in the sector, with many interesting projects and companies seeking financing and reasonable valuations providing an extra incentive. Increased spending on research by governments as well as research institutions and corporates means nanotechnology is closer to being fully explored and exploited.

“Looking at the Internet and biotechnology, commercial exploitation generally happens 20 years after an idea is first developed and nanotechnology is just reaching this stage,” said Samsinger.

Last year, the German association of engineers (Verein Deutscher Ingenieure) estimated the global market for nanotechnology products and processes at EURO54 billion. Samsinger believes few firms are ready to exploit this potential and that Capital Stage is positioning itself at the forefront of this market. US firm Draper Fisher Jurvetson has shown interest in the sector and Samsinger is aware of two Silicon Valley-based groups, as well as some European initiatives still at an early stage. Coinciding with the Nanotech Invest launch, US firm Harris & Harris Group changed its name to Small-Technology Venture Capital, to tie in with its new focus on nanotechnology, microsystems and microelectronical systems (MEMS).

Nanotech Invest’s specialist areas are nano-biotechnology, nano-materials, nano-electronics and nano-instruments. Fund raising will target institutional investors in Germany and Switzerland and fund-of-funds. Capital Stage also hopes to secure industrial investors, although it will limit such participation to one per investment sector to avoid a conflict of strategic interests. The vehicle will invest globally through collaborations with other investors, including US nanotech specialists Knowledge Management and Nanotech Partners, a sector-focused global fund backed by Mitsubishi and set to reach YEN15 billion (EURO130 million) this summer. Nanotech Invest is also hoping to confirm another US-based partner and one in the UK. It will make early stage investments of EURO500,000 to EURO5 million mainly in Germany, Switzerland, Scandinavia, UK and the Netherlands.

Capital Stage has already committed around EURO100 million to investments in IT/new media, biotechnology, advanced technologies and new energies. Of these commitments, two are nanotechnology-related. The first of these, made 18 months ago, was nanotype GmbH, a spinout of the university in Munich. Last August the firm also invested in surface technology company, o.m.t.