OVP Venture Partners recently held a $250 million final close on its seventh fund and added Mark Ashida to its partnership roster.
Ashida will serve as partner at OVP, focused on the security, networking and infrastructure spaces. He previously was with Microsoft as general manager of Windows enterprise networking and, before that, was COO of InterTrust, a public digital rights management company sold in 2002.
He joins OVP as the Pacific Northwest-based VC firm wrapped up fund-raising for its latest vehicle. The firm had held a $207 million first close in May 2006, but extended the fund-raising to accept commitments from the Meketa Investment Group and the College of the Holy Cross. Other new LPs include the New York State Common Fund, the Alfred I. DuPont Testamentary Trust and Olin College of Engineering, while returnees include the Oregon Public Employees Retirement Fund (which committed $50 million), the Washington State Investment Board ($40 million) and the endowments of Indiana University and Kenyon College.
The mixed early stage life sciences and information technology fund is about 33% larger than VI, a $187.5 million fund raised in 2001.
Remarkably, the firm (which has offices in Kirkland, Wash., and Portland, Ore.) is setting a fund-raising record despite losing limited partners who passed on the firm in favor of buyout and hedge funds. The firm lost two of its LPs to alternative asset classes, despite a strong showing from other previous investors. Managing Partner Gerry Langeler declined to name the LPs who opted out.
“One basically said, ‘We’re putting all of our money in hedge funds,’” Langeler said last year. He cited a change in that fund’s top investment management position for the shift in its investment strategy.
The other lost LP passed up venture funds altogether in favor of more leveraged buyout shops. Langeler said that the investor got into venture in 1999 and had not been happy with its returns from the asset class. The fund looked at LBO performance over the last five years and decided to ditch its stake in venture.
In the last year, OVP has had two of its portfolio companies acquired, according to Thomson Financial (publisher of PE Week). OVP-backed email marketer @Once.com was acquired in January 2005 by InfoUSA (Nasdaq: IUSA) for $7.4 million. The startup had raised more than $17 million from OVP and an undisclosed partner. The firm also sold chipmaker Airgo Networks to Qualcomm (Nasdaq: QCOM) in December for an undisclosed amount. The startup had raised $144 million from OVP, Accel Partners, Blue Run Ventures, Oak Investment Partners and Sevin Rosen Funds.
“The investing climate for us in the last four years has been more attractive than it has been going back to the early ‘90s,” Langeler said last year. “We’re getting in at prices we haven’t seen since the mid eighties.”
OVP, which now has more than $700 million under management, will continue to focus on the Pacific Northwest for the majority of its investments. Even before Ashida joined the firm, OVP has worked closely with Microsoft to get a first look at the software giant’s spin-offs; one of the OVP partners even keeps a Microsoft executive organization chart on her wall to monitor potential investment opportunities.
The firm will also continue to closely monitor Intel Corp. (Nasdaq: INTC), which has a large research division stationed in Oregon. OVP Partner John Hull was previously with Intel Capital, serving as director of the $500 million Intel Communications Fund.
OVP isn’t the only firm looking to capitalize on the growth of the Pacific Northwest. Madrona Venture Group closed its third fund at $167 million in April 2006 and has also hired former Microsoft executives to help it mine the software giant. —Alexander Haislip and Dan Primack