FLV Fund Finally Fades Away

The Flanders Language Valley Fund (FLV Fund), a Belgian-based venture capital firm that found misfortune on several continents, announced a final end to its troubled life earlier this month. The fund, which had earlier announced its intention to sell off its remaining assets, said that it signed a “framework agreement” to sell off the bulk of its portfolio to an undisclosed secondary buyer.

The fund, which invested in language education, translation and interpretation technology, announced in November that it would be winding itself down with a goal of being completely shut down by the end of 2004.

FLV named 12 companies that it said it expected would be in the portfolio it is selling: Adeptra, Cageka, Changing Worlds, HAL, Inno Fund, Lips, M-Commerce, Mindmaker, Onset Technologies, Telemessage, Transics and Shazam Entertainment. Most of these companies are U.S. or European-based software and services providers.

The firm did not return calls for comment and did not disclose the name of the secondary buyer for the portfolio other than to say in a statement that it was finalizing an agreement with a “European investment group.”

The firm was damaged by the embezzlement of $30 million from its Korean fund, FLV Fund Korean, and with its association with Belgian company Lernout & Hauspie Speech Products, which filed for bankruptcy after it was found to have engaged in Enron-style accounting practices.

The FLV Fund’s U.S.-based offices were shuttered in August 2002. U.S. investments had comprised just over 10% of the fund’s portfolio at one time and the Aartselaar, Belgium-based firm had offices in Massachusetts and Silicon Valley. FLV Fund was listed on the European NASDAQ exchange but de-listed in 2003.

After its latest secondary transaction does away with the bulk of the portfolio, FLV will be left with only three companies: Belgian clinical research firm C&T Paradigm; Delft, Netherlands-based software developer Irion Technologies; and French tourism promotion media provider LibertyTV. The firm said it is in negotiations to sell those investments as well.

At the time of its 2001 announcement that it would shut down, the firm had 39 portfolio companies, but it then cut off all new investments. The fund has posted consistent losses since then and listed its assets as being worth about $9 million in October, down from $45 million in mid-2002. New management returned about $44 million to investors following the Korean embezzlement scandal in 2000.