Eucalyptus Ventures Rounds Up $55 Million

Eucalyptus Ventures, the first fruit of a strategic alliance between Hambrecht & Quist (H&Q) of the US and the Israeli investment bank Tamir Fishman & Co, held a final close on $55 million (ecu 46 million) in November.

Among a plethora of vehicles focusing on Israel’s prolific high-technology sectors, Eucalyptus Ventures is unique in having principals based in both in Silicon Valley and on the ground in Israel. The fund will invest both in Israeli companies and businesses headquartered in the US but with significant operations in Israel, such as research and development facilities. The fund’s target sectors are communications; Internet and intranet technologies; semiconductor technologies; and medical systems and devices.

The fund, co-sponsored by H&Q and Tamir Fishman, will also benefit from a highly experienced management team, led by co-founding managing directors Aaron Mankovski and Bruce Crocker. Aaron Mankovski, based in Tel Aviv, was previously co-managing director of Kardan Technology Ventures and prior to that, spent 15 years in management and sales and marketing roles with IBM and Orbotech. Bruce Crocker, formerly a managing director in H&Q’s technology investment banking group, has more than 25 years’ experience in high-technology industries, including hands-on roles in the start-up management of two successful software companies. Eldad Tamir and Danny Fishman, co-founders and CEOs of Tamir Fishman, will both be actively involved in managing Eucalyptus Ventures.

Eucalyptus Ventures and its investees are expected to benefit from the sector experience, equity research capabilities and global investment banking presence of H&Q. Tamir Fishman, meanwhile, will provide research services, access to deal flow and strategic advice based on its extensive network of industry relationships within Israel.

Eucalyptus Ventures was launched during the first quarter of 1998 with a target of $50 million. H&Q’s private equity market group acted as international placement agent for the fund, working alongside Tamir Fishman & Co, which marketed the vehicle in its domestic market. Eucalyptus Ventures attracted commitments from institutional investors in the US, Europe and Israel. CEOs of technology corporations, other high-net-worth individuals, and Israeli technology companies also invested in the fund. Key investors in Eucalyptus include Teachers’ Insurance Annuity Associaton of America’s College Retirement Employee Fund, Eastman Kodak Company, Dow Chemical Company, Crescendo Venture Management, Migdall Insurance and Entrepreneurial Capital.

The fund’s investments to date include Mysticom, XaCCT Technologies and Computer Telephony Internet Integration.