Accenture has confirmed reports that it plans to withdraw from venture capital investments in a move designed to reduce volatility in the company’s future earnings.
Accenture said that it expects to aggregate its minority ownership interests into a single subsidiary, which it will sell, retaining only a modest percentage ownership. Accenture has engaged an investment bank and is currently in discussions with potential purchasers. It hopes to complete the transaction by the end of the calendar year.
Accenture's loss on investments in the second quarter includes a charge of $212m related to the loss the company expects to incur on this sale transaction. After giving effect to the charge, the venture and investment portfolio is expected to have a net book value of approximately $95m, $43m of which is hedged.
Cherine Chalaby, managing partner of Accenture Technology Ventures at the company’s European headquarters in London, was unavailable for comment.
Launched in December 1999, Accenture Technology Ventures is the venture capital unit of Accenture. The portfolio includes more than 70 innovative companies worldwide. Accenture Technology Ventures has European offices in London, Dusseldorf and Stockholm. Recent European investments have included Portum, a German web-based software developer and Wicom, a developer of communications solutions.