Lake Street Capital has begun pre-marketing its third direct secondaries fund, with books expected to be sent out next month. The San Francisco-based firm is targeting $150 million, with an initial close expected during the first quarter of 2006.
Lake Street was founded in 2003 to acquire portfolio company positions from venture capital, buyout and other private equity firms (a.k.a. direct secondaries). It initially raised $5 million for a special purpose acquisition fund designed to acquire just one position.
In December 2003, however, it closed on $35 million for a second fund that included fellow secondary players Pomona Capital and Pantheon Ventures as limited partners. That fund has acquired positions from such firms as Dell Ventures and Intel Capital and has about 80 active portfolio companies and four realized investments.
The realized investments are Netscaler Inc., an application networking company acquired by Citrix (Nasdaq: CITRIX); RAINfinity Inc., a network storage company acquired by EMC Corp. (NYSE: EMC); Gyration Inc., a developer of user-interface devices that was acquired by Thomson (NYSE: TMS), which is not related to PE Week’s publisher; and PacketVideo Corp., a mobile audio and video company that recently was acquired by NextWave Wireless LLC. Existing portfolio companies include 2Wire Inc., eHealthInsurance Services Inc., and Agility Communications Inc.
Lake Street declined to comment, citing SEC restrictions. It currently has a five-person investment staff, including co-founding partners Gretchen Knoell and Zachary Abrams.