Illuminator turns out the lights on its dotcoms

The Incubator writes off its dotcom investments and goes bargain-hunting.

Illuminator has written off its dotcom investments following the market slump. The incubator, set up by Brian Myerson and Julian Treger in 1999, believes it will lose about £270,000.

However, Illuminator now hopes to take advantage of the hostile market through its TechRescue fund, aimed at stricken technology companies.

Myerson said the plunging market had forced Illuminator’s hand. “The spectacular collapse of certain tech-related stocks in the market downgraded the entire sector,” he said.

The cull leaves Illuminator with only three investments; Clear Technology, a transaction software company; Trademet, which develops supply-chain technology; and Puma II, an investment fund. So far, Puma II has invested about 17 per cent of its capital.

News of the dotcoms’ fate came as Illuminator announced operational losses of £15m. However, much of the money went into its merger with MultiMedia, agreed in September last year. Illuminator has £9m in the bank.

Illuminator merged with MultiMedia in order to set up its TechRescue fund, which aims to invest in struggling technology companies hit by market sentiment that can be restored to profitability.

The incubator has put £5m into TechRescue and aims to raise between £50m and £100m. The fund will announce its first closing at £25m and is sponsored by Shore Capital.