Israel-based Vintage Venture Partners has achieved a second and final closing of its debut secondaries fund, with $64 million (€54 million) of commitments.
Vintage set a target of $60 million to $75 million when it launched the fund in September 2002. It went on to complete a first closing in June 2003 at $30 million.
Investors in the fund include foundations, corporations, funds of funds and family trusts based in Canada, the US, Switzerland, Germany and Israel.
The fund, which is headquartered in Herzliya Pituach, will focus on purchasing limited partnership interests of Israel-related venture capital funds and direct portfolios of Israel-related technology investments.
On the rationale for launching a secondaries fund focused on Israel, Vintage co-founder Alan Feld said: “The country is large enough to produce significant secondary activity but is also specialised enough that a local presence is crucial in terms of conducting thorough due diligence and understanding the opportunities.”
Feld told PrivateEquityOnline the firm had struck informal relationships with a “select number” of international secondaries investors. He said they included those with an existing focus on Israel that wanted an on-the-ground partner with good relationships and those with no existing focus seeking to diversify their exposure.
Feld said the Israeli venture market has raised around $8.5 billion since 1987 and is around the same size as non-California US and only slightly smaller than the UK. He added: “We think the opportunity to buy LP interests is probably worth around $250 million a year. The size of the direct portfolio market is more difficult to tell but we believe there are significant opportunities.”
Israel has yet to see anything like the same consolidation that has already occurred in the US and Europe, but Feld maintained there are a large number of Israeli investors either uninterested in, or unable to, raise subsequent funds – especially in the corporate arena.
Feld claimed Vintage is only the second domestic private equity secondaries operation in Israel, following the establishment of The Harvest Fund in 1998. The Harvest Fund, which is an affiliate of Israeli venture capital firm Evergreen Partners, has raised two secondaries funds. It has a strategic relationship with Landmark Partners, the US-based secondaries investor, which has a 20 percent interest in both funds.
Vintage was founded by Feld, Aharon Dovrat and Shlomo Dovrat. Feld has ten years’ experience in the Israeli technology venture capital market, having previously been a general partner at Israel Seed Partners and Vertex Israel. Aharon and Shlomo Dovrat were the founders of Dovrat Group, a private equity house managing five technology-related funds.
Feld said Vintage had completed a number of transactions already, but declined to provide further details of either the transactions or amount committed.