GAC, Hamilton Lane snap up Viventures

US-based Global Asset Capital and Hamilton Lane have received regulatory approval for their acquisition of the venture capital arm of Vivendi Universal.

( Global Asset Capital and Hamilton Lane Advisors have received regulatory approval to complete their acquisition of Viventures Partners, the venture capital arm of Vivendi Universal.


Terms of the transaction were not disclosed. The two partners will acquire the 54 companies Viventures lists in its portfolio, plus all of the more than $400m the firm has under management.


Approval for the transaction to proceed was granted by French regulatory authority the Commission des Operations de Bourse.


“This is a wonderful opportunity for us to make our mark on the European market, where we hope to remain an active player for years to come,” said Riaz Valani, Global Asset Capital’s founding general partner. “I firmly believe in the future of Viventures and the long term potential of its current investments.


“Our relationship with GAC leverages both firms’ experiences and will allow Viventures to profit from both organisations and their diverse backgrounds,” Les Brun, Hamilton Lane’s chairman, said in the statement. “GAC is committed to staying in France and to investing the Fund's remaining commitments over the coming years. We are confident that this is the beginning of a long and successful relationship.”


Paris-based Viventures was established in 1998 by Vivendi as an early stage global venture capital firm focused on the information technology and telecommunication sectors. Viventures, which opened a US office in 1998, a Singapore office in 1999, and a London office in October 2001, launched a fund targeted at $400m in the second quarter of 2000 and closed it on $600m in January last year.


The fund received E200m, or one third of its capital, from VivendiNet, the internet arm of Vivendi Universal. Approximately 30 other international limited partners contributed to the fund, including European investors Compagnie Nationale à Portefeuille (groupe Albert Frère), SG Asset Management, RTL Group, GBL Finance, Azeo, Rallye, Atos, British Telecom, Francarep, Mitiska Net Fund Europe and Siemens Venture Capital.


In June last year, adverse market conditions forced Viventures to return a fifth of the fund to its limited partners. The firm had more than halved its personnel by the end of last year.


Viventures Partners focuses on the information technology and telecommunication sectors investing $3m to $10m per transaction. Geographically, 50 per cent of Viventures’ investments are in Europe, 40 per cent to 45 per cent in North America, and five to ten per cent in Asia.


According to a press release, Global Asset Capital and Hamilton Lane made the acquisition because of a joint belief private equity will continue to expand in Europe and that France will be a major center of growth. The goal of the two firms is to build a pan-European standard for private equity groups. Viventures is the centrepiece of an effort to become a leading repository of high tech talent across the continent.


For private equity players to circle debt-laden financial conglomerates like Vivendi looking to snap up assets at fire sale prices is nothing new. And there are plenty of secondary specialists standing by to acquire under performing portfolios. But a major entity divesting its entire venture capital arm, lock, stock and barrel, signals the emergence of an entirely new market.


A new breed of acquisition players is emerging to take advantage of such opportunities. One such firm is New York-based ProtoStar, founded by former First Atlantic Partners managing director Joseph Haviv with the financial backing of Goldman Sachs’ secondaries group. W Capital Partners, which is currently raising a $150m fund, is another firm seeking to acquire direct investment portfolios from corporate venture capital arms. In March, W Capital, alongside Goldman Sachs, bought the venture investments of Tredegar Corp. Other corporations, including to have exited the principal investment business through what might be termed a GP replacement include British Telecom, Dime Bank and Lucent.