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GKM Banks On $60M for VC Fund I

Amid talk that a number of investment banking venture arms are preparing to incorporate third party limited partners, Los Angeles-based Gerard Klauer Mattison & Co. became one of the first firms to actually do so last week by launching an initial vehicle targeted at $60 million. The fund has already made a pair of investments and expects to hold a first close worth between $20 million to $30 million by year-end.

“We think that with our 20 odd research analysts, investment banking platform and firm’s deal flow, we are uniquely suited to have a venture fund,” said Jonathan Bloch, managing partner with the new fund.

He added that the firm’s media and entertainment experience will make it an ideal fit with entertainment and technology convergence plays.

“We’re well-known in that area because one of our founders – Manny Gerard – was the first analyst to cover entertainment and became COO of Warner Communications,” Bloch said. “Plus, we’re located in Southern California.”

It is important to note, however, that the firm is not prepared to buck the prevailing VC trend of shunning new media content companies. Bloch said he feels it’s too early to look at those types of firms and that GKM would focus on infrastructure offerings like its recent investment in streaming media solutions provider Hello Networks.

The fund will also invest in more general early-stage infrastructure companies and Internet-related technologies. Average Series A plays will come in between $2 million to $4 million with half of the vehicle’s total capital dedicated to follow-on investments.

Limited partnership interests are being offered with a 20% carried interest structure and 10-year term.

Joining Bloch is fellow managing director Lance Horn, former European director of broadcast services with Yahoo!