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WaMu joins secondaries parade

Washington Mutual Inc., the former owner of Washington Mutual Savings Bank, is aiming to sell its stakes in 10 venture funds, according to a bankruptcy court filing in late November.

The VC holdings include investments in Arch Venture Partners (fund V); ArrowPath Venture Capital (fund II); Digital Partners (fund III); FT Ventures (funds II and III and a sidecar fund from 1998); Madrona Venture Group (funds I and III); Maveron Equity Partners (its 2000 vintage fund); and Northwest Venture Partners (fund III).

WaMu has committed about $36.5 million to the 10 funds, according to court documents, with the most recent occuring last year when it signed on to a $10 million investment in San Francisco-based FT Ventures’ third fund. FT Ventures raised about $512 million in 2007 to invest in expansion stage deals. WaMu reported that it has contributed $3.3 million to the fund to date.

Overall, the company has contributed $27.8 million to the 10 funds.

Madrona Managing Directors Matt McIlwain and Greg Gottesman told John Cook of TechFlash that WaMu’s decision to sell the portfolio would have little impact on the firm.

In addition, Washington Mutual is seeking to sell its stakes in WaveLink Corp., Financial Engines Inc. and Isilon Systems Inc.

The VC funds are being sold by Washington Mutual Inc., which is the holding company that is operating as a separate entity from the banking business now owned by JP Morgan Chase. Washington Mutual Inc. is the business that is currently in Chapter 11, and its assets include common stock interest in Washington Mutual bank.

In late September, JP Morgan paid $1.9 billion for the bank subsidiaries. Washington Mutual Bank’s closure and receivership is the largest bank failure in history.