San Francisco-based Industry Ventures has raised $700 million across two funds to invest in venture capital secondaries opportunities.
The firm raised $500 million for Industry Ventures Secondary VIII, surpassing its initial target of $425 million, according to a statement. The fund will invest in individual direct secondaries, portfolios of direct secondaries, VC fund stakes and ‘special situations’, which it classes as deals that require unique deal structuring.
It also gathered $200 million for its Special Opportunities Fund, which will allow the firm to “invest in larger transactions in parallel to the main fund”.
Hans Swildens, chief executive and founder, told Secondaries Investor that his firm’s investor base was very supportive.
“Our investors are really happy and a lot of them increased their commitments to our fund, and so our fund size went up a little bit, but we capped it so it didn’t get too big,” Swildens said.
Fund VIII will aim to acquire 50 to 60 underlying holdings, with about 80 percent of it invested in the top 25 of those holdings, he said. The firm has yet to begin investing from the vehicle, and its predecessor is about 70 percent invested.
Swildens said he expects Fund VII to be fully invested by the end of the year.
The firm offered investors a choice of fee structures, according to a presentation made to the Dallas Police and Fire Pension System, which invested in the fund in April. LPs could either opt for 17.5 percent carry rate over a hurdle rate of 6 percent, or they could do away with the hurdle rate altogether and pay 15 percent carry.
The target return for the fund is 2x investors’ money and an internal rate of return of 20 percent.
“Leading VC-backed companies face a myriad of liquidity challenges as the IPO market is unpredictable,” Swildens said.
Including the latest two funds, Industry Ventures manages $2.7 billion of assets. With an office in Washington, DC in addition to its headquarters, the firm makes primary fund commitments and co-investments alongside its secondaries activity.
Click here for our April story on Industry Ventures Secondary Fund VIII’s fund terms.
Adam Le contributed to this report.