Westly, speaking at the Reuters Global Climate and Alternative Energy Summit in San Francisco last week, says that the fund will exceed $100 million in commitments. PE Week reported in June 2008 that the firm had locked down about $79 million in commitments for the fund. Similar to the firm’s $12 million debut vehicle, the second fund will concentrate mostly on cleantech investments.
As previously reported by PE Week, limited partners in the fund include the Tudor Investment Corp., the State of Indiana Public Employees’ Retirement Fund and San Francisco’s Goldman family, heirs to the Levi Strauss fortune.
Westly, who as state controller served on the boards of California Public Employees’ Retirement System and the California State Teachers’ Retirement System, is himself an LP in the fund. In addition, the venture firm’s other managing director, Michael Dorsey, is also an LP. While most venture firms typically request that partners contribute 1% to 3% of a fund’s total, Westly previously said that he and Dorsey each committed about 20% of their net assets to Westly Group II.
“I used to sit on boards of CalPERS and CalSTRS, and it didn’t matter what kind of fund you had,” Westly previously told PE Week. “The number one correlation to being successful was the amount of capital the principals themselves had committed. If you have $1 million of your own money in the deal, you’re going to work pretty hard. I’m working pretty hard, too.”
In regards to the close of the second fund, Westly says that a formal announcement will come this week.
“Our goal was to raise $100 million despite a historically challenging financial market. We will exceed that goal,” Westly told Reuters.
Westly, who was previously a top executive with online auction company eBay before he served in public office, said he remains confident that cleantech companies will help propel future initial public offerings.
“I’m incredibly bullish about the IPO market in 2010,” says Westly, who predicts there will be a dozen clean technology IPOs in the next 12 months. “It wouldn’t surprise me if [the market] exceeded that.”
In the early summer, Westly told PE Week that one likely IPO candidate is
Meanwhile, one cleantech company that’s expected to debut sooner than that is venture-backed lithium-ion battery maker
Westly’s venture firm is neither an investor in Silver Spring nor A123.
But Westly has had a strong case to make. His first fund, backed exclusively with money from his own pocket, was profitable within 11 months, thanks to a $3.5 million investment he made in Akeena Solar (Nasdaq: AKNS), a company that installs solar panel systems nationwide and was trading over the counter at the time of the investment.
The Westly Group has invested in smart-grid technology, green building materials, recycling and solar energy. Another investment area of interest to the Westly Group is electric vehicles. The firm is an investor in electric car maker Tesla Motors.
“We think the entire solar marketplace is dynamic,” Westly says. “It is going to change quickly. There will continue to be new opportunities and we are looking at two to three solar companies as we speak.”
Westly Group is also seeking opportunities in China, which the venture capital firm plans to use as a springboard into the broader Asia market.
Westly noted he travels to China every 90 days to meet with other venture capital firms as well as government officials.
PE Week contributed to this report.