Genesis Closes $150m Fund, as Evergreen Prepares a FifthSeptember 21, 2005 Haaretz
By Oded Hermoni
Venture capital firm Genesis Partners announced the closing of its Genesis Partners III yesterday, at $150 million. The group, founded in 1997, now manages more than $500 million.
This fund was raised differently than other VC funds in Israel over the past two years because more than 70 percent of its investors had also been past investors. Other funds, such as Giza Group and Pitango Venture Capital, have had investor turnover rates of more than 40 percent. The high proportion of return investors derives from a satisfaction with the first Genesis fund, considered to possess one of the best track records in the business after bringing a return on investment ratio of greater than 1.5.
Genesis Partners II was also relatively successful, given that it was founded in 1999, which is seen as the worst year among VC groups. That fund has returned $60 million on two exits - Appilog and Modem-Art.
Genesis’ success in bringing in former investors can also be attributed to the fact that it focuses on institutions rather than strategic investors. For example, the largest investor in its current fund is Quebec’s national insurance institute, known as the CDP (Caisse de Depot et Placement), which is believed to have invested more than $20 million.
Meanwhile, VC group Evergreen Venture Partners intends to launch its fifthfundby year’s end, at a value of at least $150 million. The last fund raised $142 million in 2002. Evergreen has yet to prepare a private placement memorandum (PPM), but managing partners Boaz Dinte and Erez Shachar are most likely to announce plans to raise the new fund at the annual limited partners meeting September 22-23 in New York City. It would be the first round in which Evergreen founders Jacob Burak and Ofer Ne’eman, who handed over the reins last year to Dinte and Shachar, are not expected to take part.
Evergreen’s previous funds are considered the most successful ever in the country. Its third fund, which raised $170 million during the height of the Internet bubble, returned $350 million to its investors, mostly from a successful exit from EXaLink, which Comverse bought for $500 million in December 2000. The fund stifi possesses several promising startups, namely BigBandNetworks, flash Networks, Identify and Traiana.
The fourth fund has invested $14 million since 2002, but without any exits to date. The company now manages $700 million.
Evergreen representatives refused to comment on the report.