21996; HarbourVest Partners can’t get enough of European cuisine, particularly cheap venture dishes. It recently bought the assets of the West LB Growth Fund from the German investment bank West LB.
London’s Nova Capital Management will manage the assets.
The firms declined to disclose the price of the deal, but the 15-company portfolio has $75 million in original commitments from West.
The transaction, announced this month, was done in an auction held last summer and officially closed in the fall. Nova will earn a management fee as well as a percentage of carried interest earned from portfolio exits.
Nova Capital Directors and Head of Ventures Olav Ostin and David Tate will manage the portfolio. The two founded the venture practice at Nova in January 2004. Tate was formerly head of investments and executive director at West LB.
The deal was the third direct European venture portfolio that HarbourVest bought in 2004. It was the first such transaction to involve Nova Capital, but representatives of the firms hope to close on other similar deals this year. In addition to the West portfolio, Nova manages four portfolios involving 40 companies.
Nova Capital had approached HarbourVest with other portfolio management opportunities, but HarbourVest found the West portfolio more compelling, said Michael Taylor, a principal with HarbourVest, who handled the transaction. The portfolio is compelling, he says, because it includes a good mix of later-stage and expansion-stage deals in high growth companies that require little follow-on funding.
The venture portfolio is comprised of European companies in media and communications, IT and life science sectors. Taylor cites MindMatics as one of the most promising companies in the portfolio. The Munich-based Internet and wireless market services provider has enjoyed success in Europe and recently opened an office in New York.
Taylor says that the secondary market’s appetite for venture is cautious but growing. “We find direct venture portfolios interesting because the companies have matured, but the pricing hasn’t caught up with the companies,” he says. “You’re getting good value for your money with later-stage, mature venture companies.”
Other companies in the West portfolio include Cerillion Technologies, a London-based provider of customer management services; Coley Pharmaceuticals, a Wellesly, Mass.-based developer of immune system stimulation drugs; enteraction TV, a London-based television advertising company; London’s European Telecommunications and Technology, which provides data and network services; and Hyperwave, a Munich-based information management provider.
HarbourVest has offices in London and Hong Kong. The firm recently added David Atterbury, a former director of private equity with Abbey National, to its London office as a vice president focused on non-U.S. secondary transactions.
Debevoise & Plimpton and Kaye Scholer advised HarbourVest and Nova on the deal.