INVESCO spin-out raising $350m fund

The ‘diversified venture capital concern’, New York-based Vedanta Capital, is raising a fund for venture and private equity investment.

INVESCO Private Capital spin-out Vedanta Capital is raising a $350 million (€227 million) fund, according to documents obtained by PEO.

The fund will make a diverse range of investments, primarily in the US, including growth equity, earlier stage investments, small buyouts, recapitalisations, spin-outs and PIPEs. Target sectors include information technology, life sciences, consumer and technology-enabled energy businesses.

New York-based Vedanta, which is described in fund marketing materials as a “diversified venture capital concern”, was launched in May 2006 by former INVESCO executives Parag Saxena, Alessandro Piol and Howard Goldstein. Saxena and Goldstein had worked together since 1984 with Piol joining them in 1995.

Saxena joined Citicorp Investment Management in 1983 which in 1988 became Chancellor Capital Management. Chancellor was then acquired by INVESCO in 1998 with Saxena becoming managing partner and founder of INVESCO Private Capital responsible for both direct and fund of funds investment activities.

The three founding general partners have since been joined by general partners Michael Patterson, Lawrence Posner and Shikrant Sathe.

The firm set out to initially focus on venture investments with the intention of expanding into a wider variety of venture and private equity activities in the future.

Investments to date from the fund include oil and gas location technology company Terralliance and cardiac imaging company Point Biomedical.

After departing INVESCO, the new group acquired control of an INVESCO-managed “collateralised fund obligation”, essentially a securitised portfolio of private equity fund interests. In January 2007, control of the $275 million Tenzing CFO was transferred from INVESCO to Vedanta. The CFO was founded in December 2004 and was to consist of over 40 private equity funds, according to rating service Fitch.

In an August 2007 press release, Vedanta claimed to have $600 million in commitments. No recent figures have been released.

In addition to the firm’s individual activities, Vedanta maintains a collaborative relationship with the $1.3 billion New Silk Route PE Asia Fund of which Parag Saxena is a founder. Vendanta seeks to leverage this relationship in order to grow portfolio companies, identify US opportunities and make investments alongside New Silk Route.

The fund has a minimum commitment of $5 million with the general partners contributing 5 percent of limited partner commitments. The investment period will be five years from the fund’s final closing.

Legal counsel to the fund is Chicago-based law firm Kirkland & Ellis.

Vedanta could not be reached for comment prior to press time.