OVP Venture Partners, an early stage firm in Kirkland Wash., has held a $207 million first close on its seventh fund despite some limited partners who passed on the firm in favor of buyout and hedge funds.
OVP VII is already about 10% bigger than OVP VI, a $187.5 million fund raised in 2001. And the fund-raising effort isn’t over, says Managing Partner Gerry Langeler, who expects fund VII to close later this year at less than $250 million.
Langeler declined to name the LPs, but he said the firm lost two investors. “One basically said, We’re putting all our money in hedge funds,'” Langeler says. He cites 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 in favor of leveraged buyout shops. The fund entered the venture asset class in 1999 and had not been happy with its returns.
“That’s called driving with the rearview mirror when they should be looking forward,” Langeler says.
Returning LPs include the Oregon Public Employees Retirement Fund and the Washington State Investment Board. New investors include GKM Generation Funds, the Alfred I. DuPont Testamentary Trust and the Olin College of Engineering.
The firm will continue to focus on the Pacific Northwest for the majority of its investments.
OVP is working closely with Microsoft to get a first look at the software giant’s spin-offs, and one of the OVP partners even keeps a Microsoft executive organization chart on her wall to monitor potential investment opportunities. Langeler says the firm will continue to closely monitor Intel Corp., which has a large research division stationed in Oregon.