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New Swiss funds for private firms

Nobel Prize winners Heinrich Rohrer, left, and Gerd K. Binning from IBM's Zurich Research Lab lead the nanotech revolution. IBM

In a sign that investors, at least institutional and pension fund investors, may be thawing out after a year of chilly economic news, three Swiss private equity houses announced they are raising new capital for investment in unquoted firms.

NanoDimension, based in Zurich and Capital Stage, a Hamburg-based financial services and securities trading company whose shares are traded on the SDAX, have both informed Swiss Venture Update that they are raising new early stage venture capital funds to invest in young companies developing nanotechnology products and services.

In addition, Capvent, based in Zurich, announced in the industry newsletter AltAssets that it is raising a $400 million “fund of funds” vehicle to invest in smaller, buy-out and venture partnerships in the fund size range of $50 million to $300 million venture capital funds.

Institutional and pension fund investors, traditionally the biggest supporters of venture capital and private equity funds, last year kept their purses tightly closed, which caused a number of private equity houses to put on ice their plans to raise new capital.

Apparently, the investor side of the market is readier than it was a year ago when Capvent, for example, originally planned to raise its capital. The firm’s fund managers kept busy by signing up advisory mandates, such as the private equity program of RWB AG (RenditeWertBeteiligungen Aktiengesellschaft), one of the largest fund of funds in Germany. It says it will now follow through with its original plan by raising the fund, in addition to the advisory mandates.

Venture capital funds test the nano waters

Capital Stage hopes to raise a SFr100 million fund to invest in early stage nanotechnology firms here and abroad. It will be managed by the head of the Swiss branch of the company, Berndt Samsinger.

NanoDimension is raising an undisclosed amount, also for investing in early stage nanotechnology firms.

Capital Stage’s fundraising is expected to end in until Autumn 2002 and will attract institutional investors in Europe and abroad. Information on NanoDimension is not yet available.

Nanotechnology attracting interest

If they are successful in raising the capital from institutional and other types of investors, it may unleash several more firms to raise capital. Swiss Venture Update is aware of at least five investment management firms who are designing new private equity funds and waiting for an opportune time to tap the market for capital.

These two new nanotechnology funds will be among the first here to target this field of the high tech sector.

Other European investors have announced interest in nanotechnology as a field with growth potential, such as Index Ventures, which raised a Pan-European early stage fund worth €300 million last year, and 3i, although neither is exclusively targeting the emerging field of nanotechnology.

Funds aimed at nanotechnology investments have been announced by a growing number of VCs around the world, especially in Silicon Valley and Japan.

by Valerie Thompson

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR