German banks consolidate VC activities

Frankfurt-based Equinet Venture Partners, the venture capital subsidiary of equinet investment bank, has taken over the management of Heptagon Capital. The change has been made in response to a request from Heptagon’s investors, Germany’s independent savings banks. Heptagon’s LPs wanted to widen the investment focus of the fund to include expansion stage investments as well as early stage deals. Going forward the fund will focus on deal flow that has come from the customer base of the savings banks.

Equinet board members, Dr Thomas Hoch and Dr Farsin Yadegardjam, will assume directorships of Heptagon Capital. Ralf Krause, director of the federation of Independent Savings Banks, will also join the board.

Heptagon Capital was established in 2000 as the venture capital subsidiary of seven German savings banks; Bordesholmer Sparkasse, Die Sparkasse Bremen, Frankfurter Sparkasse, Hamburger Sparkasse, Spar- und Leihkasse zu Bredstedt, Sparkasse Mittelholstein and Sparkasse zu Lübeck. The firm is based in Hamburg and currently has capital resources of €15m. Heptagon focused on investments in progressive, expanding businesses, particularly innovative, young companies. Its current portfolio currently holds investments in four companies in IT and life science sectors. Last year it made commitments to pharmaceutical firm Euroimmun Medizinische Labordiagnostika and Cologne-based software developer Eisfeld Datentechnik.

The equinet group is an investment bank focusing on the small and mid-cap segment. Its VC arm, active since 1998, invests in young technology companies, specifically IT, life science/biotechnology and basic research and interpenetrating technologies (e.g. materials engineering, physical technology, communications technology, bio-informatics, medical informatics).

Equinet Venture Partners manages three VC funds, including Heptagon Capital. Equinet Early Stage Capital Fund No. 1, launched in 2000, is still being invested but three deals have been realised, eFonds24, GetGo (both through trade sales), and BioTissue Technologies (via IPO). A follow-on fund, Venture Capital Rheinland-Pfalz, includes investments from ISB, the Investment and Economic Development Bank of the German state of Rhineland-Palatinate, Landesbank Rheinland-Pfalz, insurance companies Debeka and Provinzial, and industrial enterprises Schott and Opel. All of the investments from the firm’s first fund have already been realised and the fund liquidated.