HarbourVest, Nova acquire West LB assets

HarbourVest Partners has funded the purchase of a portfolio of venture assets from West LB, which will be managed by Nova Capital Management.

HarbourVest Partners, the US-based private equity fund of funds and secondaries specialist, has teamed up with Nova Capital Management, a London-based manager of private equity portfolios, to acquire assets from the West LB-owned West LB Growth Fund. The consideration for the deal has not been revealed due to a confidentiality agreement between the various parties.  

The transaction involved the acquisition of a German GmbH structure comprising 15 underlying later-stage venture investments. The portfolio companies operate in the technology, media and communications and life science sectors, and include the likes of: Cerillion Technologies, a London-based customer relationship management (CRM) firm; Hyperwave, a Munich-headquartered enterprise content management business; and Coley Pharmaceuticals, a discoverer and developer of innovative therapeutics based in Wellesley, Massachusetts.

In a statement, Nova Capital Management said David Tate and Olav Ostin, who joined the firm in January 2004 to develop a ventures arm to complement the existing buyout-focused business, would lead the management of the portfolio. 

Michael Kelly, managing director of Nova, told PrivateEquityOnline that the firm had agreed a management fee with HarbourVest and would also pocket an element of carried interest from the eventual realisation of the assets. He said the auction of the assets by West LB, which resulted from their lack of strategic fit with the German bank’s core activities, attracted “at least six” bidders.

Kelly added that this was the first time Nova had teamed up with HarbourVest, but said that the two organisations are “working alongside each other on a number of other situations” at the current time.

Having been founded in 2002, Nova now has four private equity portfolios under management, comprising some 40 companies. In December 2002 the firm acquired 20 UK companies from Lica Development Capital, then in July 2004 took over Albemarle Private Equity’s third fund in the UK’s first hostile acquisition of a private equity management company. Most recently, it completed its first US deal with the acquisition of a healthcare portfolio from Atlantic Medical Capital.

Nova was launched in 2002 by Michael Kelly, former senior partner of Executive Interim Management; David Williamson, former chief executive of Granville Baird; and Lord Hodgson, former chairman of Granville Baird. In June 2003, Caledonia Investments acquired a 33 percent stake in the firm.

HarbourVest Partners, which is based in Boston, London and Hong Kong, provides vehicles for institutional investors to invest in the venture capital and buyout markets in the US, Europe and elsewhere. It has committed more than $10.3 billion to newly formed funds, over $3 billion to secondary partnership interests and $2.1 billion directly to operating companies.

Nova and HarbourVest were advised on the acquisition of the West LB portfolio by US-based law firms Debevoise & Plimpton and Kaye Scholer.