Investec, a South African bank who specialise in banking and asset management are planning a €75 million venture capital fund in support of Irish companies who are in the early stages of high growth.
Ulster Bank and Diageo set up a similar fund in October 2008 called the Ulster Bank Diageo Venture Fund Limited Partnership and the new Investec venture capital fund will be the successor to this initiative which is due to wind down its activities next year.
Managing partner of Investec’s venture capital activities, Michael Murphy said “We have support and will raise the [new] fund,”. He also hoped to have the deal finalised within a six month period… “We’d love to have it nailed down within six months.”
Investec plan to approach and seek funds from Enterprise Ireland and the Ireland Strategic Investment Funds.
The latest accounts for the Ulster Bank Diageo fund highlighted a profit of €15 million on the disposal of investments last year, up from €13 million in 2015.
According to the Irish Times, the Ulster Bank Diageo fund made an €11.4 million profit on its 19.8 per cent stake in Fenergo in 2016. The fund had invested €3.5 million in the business in 2013, and it was sold to Insight Venture Partners with an equity value of €85 million.
The fund achieved four “highly profitable” exits over the last two years including €7.33 million for its 22.7 per cent shareholding in Helix Health Group Ltd, following its sale to Ely Global in September 2014. The fund had invested €5 million in the business in April 2011. It has also created a cash return of 2.9 times on its stake in Advanced Manufacturing Control Systems Ltd.
The fund generated investments ranging between €500,000 and €5 million with 20 Irish companies backed over a number of different sectors.
It is not clear if Ulster Bank or Diageo will support the new fund proposed by Investec.