Lexington-backed Azini’s third fund is half invested

Azini Capital’s third fund, Azini III, is now 50 percent invested, after a recent investment in end-user computing risk management company ClusterSeven.

The fund, which closed in 2014 with $100 million, has made four investments and has already had one exit.

The fund, which specialises in direct secondaries investment in growth-stage companies, has only one investor, Lexington Partners, which manages secondary acquisition funds.

“It’s a very good relationship but it’s quite unusual,” said Nick Habgood, managing partner at London-based Azini, which invests in growth stage technology companies. “We play in a space where they probably wouldn’t play directly with their own resources and so we give them exposure to a really interesting niche within the secondaries market.”

Azini typically takes a 20 percent to 50 percent interest in companies but ClusterSeven was an exception, as the firm has acquired 100 percent of the company. Out of the firm’s portfolio of 12 companies, Azini holds more than 50 percent in only three instances. Azini typically invests between $8 million and $15 million per company.

London-based ClusterSeven has developed software products that provide oversight and transparency of a firm’s spreadsheets, user-built databases and modelling tools, also helping firms balance governance, risk and regulatory compliance obligations. Azini’s investment in the company was announced on Thursday.

Habgood anticipates that Azini’s third fund will close about one to two new investments by summer’s end and that the fund could be fully invested by the middle of 2016, although he noted that pace could change depending on finding attractive dealflow.

Azini typically exits portfolio companies by selling to large technology corporations, often based in the US. Its second fund, which was also $100 million, was fully invested in a portfolio of 18 companies purchased from Apax Partners.

Azini doesn’t have any firm plans regarding its fourth fund yet. “If our performance is good, the fundraising will take care of itself,” Habgood said.