GI Ventures broadens investment horizon

GI Ventures is broadening the scope of its investments with its second fund called GermanCapital. GermanCapital has a target of EURO100 million and will focus on the mid-market. This is a complete change of focus from the group’s first fund, GermanIncubator, a EURO10 million investment vehicle launched in April 2000, which targeted seed and start-up companies in the German-speaking countries.

GermanCapital has already secured the original investor from the first fund – HypoVereinsbank – as its lead investor. Juergen Diegruber, founder and partner of GI Ventures, is pleased with the fund’s progress so far. “We anticipate a first closing in a month’s time. We have been in discussions with investors for a while. It looks like we will have a closing by the end of the year.”

Geographical focus of the fund will be Germany, Austria and Switzerland. The fund will invest in between eight and ten transactions. Typical equity size will be EURO10 million to EURO15 million in companies with an enterprise value of between EURO30 million and EURO100 million. Diegruber sees a niche for German deals in the EURO10 million to EURO15 million range and does not expect any obstacles raising capital for this new fund. He adds that unresolved succession issues, accelerated growth and tighter financing requirements by the traditional lending banks have forced a large number of German mid-caps to revisit their insufficient equity positions.

GI Ventures first fund is currently EURO2.3 million, or 23 per cent invested in four portfolio companies.