West Steag Partners, a euro100 million fund, has been set up to invest in high tech companies in Europe, Israel and the US. The joint venture has been agreed between German bank West LB and German power company Steag AG. Both partners hold an equal share in the joint-venture to which each has committed euro50 million.
The fund aims to build a portfolio of high tech companies in high growth sectors, funding them through to sale or flotation. The main sectors of investment will be electronics, optics, information technology (hardware) or microsystems technology. The headquarters of the company will be in Essen, an appropriate location for the venture as the Rhine/Ruhr district in Germany is among one of the target sectors for investment. The new entity will be taking advantage of Steag’s experience in the field of electronic systems and the entire management team of Steag’s Electronic Systems division will be transferring to West Steag Partners.
Steag will benefit from West LB as an internationally experienced private equity partner that has carried out transactions both in new and old economy companies. West LB invests directly and indirectly through specialised funds in opportunities ranging from start-up and expansion financing to buyout and bridge financing.
At a time when technology is not necessarily a preferred option for investment, Hans-Georg Betz, spokesperson for the new venture is positive: “Counter-cyclical action, that is, buying when the prices are low, is an opportunity for future profits also in the venture capital business,” he says.