French high-tech investment specialist Galileo, which this July completed its own buyout from Worms & Cie, shortly afterwards held a FFr 350 million first closing on Galileo II. The newly independent group has set a FFr 500 million (ecu 75 million) target for the FCPR, a successor to the FFr 150 million “evergreen” Galileo vehicle.
The buyout of the Galileo management company and evergreen fund follows last year’s takeover of Worms & Cie by Ifil, part of Italy’s Agnelli Group. After discussions with the Galileo management team of Jol Flichy, Michel Angue and Christophe Viet, Agnelli agreed to a spin-out of the venture fund via a buyout.
The deal was effected as a joint venture with Alpha Associes, one of France’s leading private equity groups.
Exact terms of the buyout were not disclosed, but Jol Flichy confirmed that Alpha Associes acquired a one-third interest in the original Galilee fund from Worms & Cie/Ifil and also owns one third of the Galileo management company; Fondinvest and Marine Wendel provided mezzanine funding to support the buyout.
Galileo – originally Galilee Investissements – started out in 1989 as a generalist development capital vehicle but later revised its investment policy to focus on younger, high-growth companies. Following the switch to “classic” venture capital, Galileo has enjoyed gross annual returns in excess of 100% over the past four years, Jol Flichy said.
Galileo II, like its predecessor, will concentrate principally on the information technology and telecommunications sectors, providing start-up and early stage funding, plus some development capital. Jol Flichy said the fund will also invest a limited amount in life sciences companies. The recent appointment of a fourth partner, Bernard Maitre, formerly with CDC Innnovation, strengthens the group’s expertise in the life sciences sector.
Although France is likely to be the main target market for Galileo II, the fund will also invest in the UK, where Galileo has a joint venture with Thompson Clive & Partners, and in Germany, where the Alpha Group has established a strong presence.
Fund raising for Galileo II began in May, with Triago acting as placement agent for the vehicle. Private Equity Holding, the Vontobel Group fund-of-funds, is the largest investor signed to date; other participants include LGT Castle, GIMV, Alpinvest, the European Investment Fund, GAN, Caisse de Depots, CGIP (to which Alpha Associis is affiliated), Fondinvest and the French government venture vehicle Fonds Publique de Capital Risque (FPCR).
Now Galieo II is operational, no new investments will be made through the original Galileo fund, which will be liquidated in the course of the next few years. Galileo II’s first investment, in a UK company, is due to complete in mid-October.