A year on from its first close, MTI has announced the third and final closing of its fourth fund, MTI4. Total commitments bring the total fund size to £104 million, well above its original target of £50 million to £75 million.
Investors in MTI4 include UK institutions and pension funds, with 17% from US-based fund of funds. A significant number of existing investors from previous funds also participated in the round.
MTI4 announced its second closing after the fund was chosen as the first investment for the government-backed UK Technology fund, which was launched last year to encourage UK institutions to invest in early stage technology companies.
Like MTI’s previous funds, there will be a focus on UK-based early stage technology deals in the following sectors: software and communications (including Internet enabling technologies), materials technology and life sciences, and industrial products. MTI does not invest in e-commerce business.
Nine new investments have already been made by the fund, with a total committed deal value of £20 million. By size, investments will typically be up to £5 million. Dr Paul Castle, founder and chief executive of MTI, expects the fund to be fully invested in about three years, targeting around 20 to 25 deals.
He said of the investor interest in the fund: “Over the 17 years since MTI was founded, we have achieved a composite net return to investors of over 18% per annum. This success has attracted several new investors, as well as many of our existing investors, to participate.”
MTI3, which is fully invested in a portfolio of 17 companies has a net IRR to investors of over 58% per annum as at December 31, 2000 and has already realised a number of successful exits. These include the IPO of Dataflex in March 2000, and the acquisitions of Taxi Interactive by Affinity Internet Holdings plc and Vegastream by Pace Micro Technology plc.