Venture Capital – Arthur Andersen ventures into new area

Arthur Andersen’s worldwide managing partner Jim Wadia in late January announced a raft of strategic projects designed to support the firm’s clients as they embrace the opportunities offered by the new economy’.

Observing that “Traditional models of wealth creation and management are not enough in a world that values speed, networking and information”, Wadia went on to unveil a number of initiatives in the venture capital sphere. Chief of these is Arthur Andersen Ventures: the group has allocated an initial $500 million (euros 492.5 million) to set up a venture fund targeting companies that provide advisory and outsourcing services to early-stage business-to-business e-commerce, new media and other Internet-based ventures. The fund will have a global remit and Wadia says Arthur Andersen “expects opportunities for equity investments to be as great outside the US as within the US”.

The new fund will also invest in Arthur Andersen strategic alliances and joint ventures worldwide. Wadia says Arthur Andersen Ventures “is the first of multiple funds we are considering”.

A spokesperson for Arthur Andersen said that in some cases, rather than directly providing equity funding from its venture allocation, Arthur Andersen might contemplate taking an equity stake in lieu of fees in return for services to a company.

Arthur Andersen Ventures has established a strategic alliance with Silicon Valley firm US Venture Partners, which will provide venture capital skills to complement Arthur Andersen’s in-house expertise. US Venture Partners’ investees, meanwhile, will gain access to Arthur Andersen services and the group’s global distribution network.

In the field of intellectual property, Arthur Andersen is joining forces with Lend Lease Corporation (Australia) and ICM Group, a leading intellectual capital management consulting firm. The partners are launching a business-to-business Internet venture to leverage the value of intellectual property assets.