Greenspring Associates has taken part in a GP-led process on an Israeli venture capital fund.
Investors in 2008-vintage Giza V were given the option to sell their holdings to the Maryland-based secondaries firm or roll with the assets into a continuation fund, according to a statement seen by Secondaries Investor.
The continuation fund received around $100 million in commitments and gives general partner Giza Venture Capital more time and capital to grow the businesses, the statement noted.
“These [GP-led] transactions can be hard to diligence, due to the nature of the underlying holdings and limited information flow,” said Hunter Somerville, general partner at Greenspring, in the statement. “However, as active investors in the Israeli ecosystem and direct investors in several of the fund’s portfolio companies, we were excited about the opportunity to add to our existing positions.”
Asante Capital advised on the deal, which senior advisor Yaron Zafir called “one of the first continuation fund transactions” in the Israeli VC industry.
Founded in 1992 by chairman Zeev Holtzman, Tel Aviv-headquartered Giza targets early-stage investments in Israeli tech companies.
Its “principal focus is on the realisation of Giza V’s remaining portfolio companies”, according to its website. The fund is described as a top-quartile performer with a net internal rate of return of 27 percent. It is not clear which date this figure is against and which assets remain in the fund.
Giza V raised $100 million by final close in 2008 from investors such as the California State Teachers’ Retirement System, New York State Common Retirement Fund and Taiwan’s National Development Fund, according to PEI data. It has not raised a flagship fund since.
Yaron Zafir joined Asante in June from Rede Partners, where he was head of secondaries advisory, Secondaries Investor reported. The firm also brought on Graeme Gunn, founder of the secondaries team at SL Capital Partners (now Aberdeen Standard Investments), as a senior advisor. Asante’s secondaries team has 10 members – six in London and four in New York.
Appetite for VC stakes was “muted” in the first half of 2020, according to Greenhill, as the risk of extended hold periods due to a challenged exit market and high cash burn caused buyers to step back from the market.
Average pricing for VC fund stakes declined 7 percentage points from the end of 2019 to 70 percent of net asset value at the end of the first half, the investment bank noted.