Munich-based venture capital firm Knorr Capital has acquired a 45 per cent stake in fellow German VC firm, KIMON-Beteiligungen further strengthening its position in the German VC market. The move follows a busy year for Knorr Capital, which is taking advantage of the consolidating German VC scene with the acquisitions of German VC firms IT Adventure and Gewoh Invest see evcj September 2001, page 19.
Knorr Capital will incorporate its 11 investments in the biotechnology and life science sectors into KIMON, resulting in a 45 per cent interest for Knorr Capital. The firm has no interest in gaining a majority in the company due to tax issues.
With this agreement, Knorr is planning to establish a broader basis for its biotechnology, medical technology and healthcare investment portfolios and plans to enter into further strategic partnerships with other VCs to help expand its portfolio and to establish a network of co-investors.
Knorr Capital is currently fund raising for its first third-party fund focused on European communications and technology companies. The fund has a target of e100 million and, taking into consideration weak market conditions, expects a first close by the end of the first quarter next.
Knorr Capital has announced a e20 million write-down in the value of its 60-company portfolio, despite selling five investments in the last quarter of 2001. This brings the company’s total write-downs for last year to e45.5 million, or nearly 50 per cent of the current value of its portfolio, resulting in unexpected losses of e14.5 million for the year. A spokesperson for the company said the recent exits had not produced the expected results, some of the companies having been sold undervalue.
In an effort to reduce costs the company will also lay off 35 of its 70 employees in its Munich, Frankfurt, Zurich and Montreal offices.