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Industry Ventures raises $400m for FoF and directs platform

The firm expects steady early secondaries dealflow thanks to opportunistic sellers, succession planning issues and allocation changes, according to managing director Roland Reynolds.

Industry Ventures has held the final close on its latest platform that includes a fund of funds vehicle and a debut direct co-investment fund.

Roland Reynolds
Roland Reynolds

The San Francisco-based firm raised more than $200 million for its fund of funds vehicle Industry Ventures Partnership Holdings IV (IVPH IV) after a year of fundraising. It also raised around $200 million for Industry Ventures Direct, a co-investment vehicle that launched at the beginning of this year, Roland Reynolds, a managing director at the firm, told Secondaries Investor.

The funds received re-ups and new commitments from a mix of government and corporate pension funds, insurance firms, endowments, foundations, family offices and the firm’s management. Filings with the SEC show IVPH IV received commitments from 75 limited partners, with seven investors committing to the co-investment vehicle.

IVPH IV will make primary commitments and early secondaries purchases in smaller VC funds, and there are no target allocations to either of the strategies. The direct vehicle will co-invest alongside the firm’s deals.

“We’re going to continue investing directly in the same way we have for the last seven years, which is co-investing alongside our fund managers in a very co-investor-friendly way,” Reynolds told Secondaries Investor. “Our hybrid fund of funds strategy is capital to support our general partner relationships, whether it’s primary capital for the general partners, early secondaries capital or direct investment that’s alongside them helping their companies.”

The fund closings mean Industry Ventures has raised more than $1.1 billion in the last two months: in June, the firm said it had raised $700 million in total across its Industry Ventures Secondary VIII and Special Opportunities Fund, both of which will invest in secondaries.

The firm expects to invest in around 15 companies from the IVPH IV and to make around 20 direct investments, Reynolds said.

Opportunistic sellers looking to lock in gains, high net worth individuals and family offices making portfolio changes due to succession planning issues, and changes in investment allocations at small foundations and endowments are providing a steady flow of early secondaries opportunities, Reynolds said.

“There’s a always a desire to trim the existing portfolios and it always usually starts with the most heavily unfunded [vehicles],” he said.

Industry Ventures was founded in 2000 and has over $3 billion in assets under management. The firm employs 18 investment professionals and has an office in Washington DC in addition to its headquarters, according to its website.