Kennet Venture Partners, the European venture capital unit of M&A advisor Broadview International, has secured independence from its parent company after the firm’s three managing directors agreed to lead a buyout.
Michael Elias, David Carratt and Javier Rojas are leading the buyout, the financial details of which have not been disclosed. The three MDs will take an equal share in the new business, which invests in early-stage networking and data communications, software and IT services. The firm advises and manages $280m in two funds and has eleven investment professionals based at offices in London and Silicon Valley.
Kennet Capital was established in 1997 as a joint venture between Broadview and private equity firm Electra Partners. The transaction comes about less than three years after Kennet became a wholly owned unit of Broadview, after it acquired Electra’s holding in the business in late 2000.
“The deal has been in the works for almost a year,” said Kennet Ventures managing director Michael Elias. “The impetus for the deal came from both sides. The partnership structure between Broadview and Kennet was right at the time, but not right for current market conditions.”
Elias said the firm was looking forward to completing the firm’s first deals post-independence. “We are more comfortable with the market now than we have been for the past 24 months. We have been very cautious during this time. The market now is comparable to that of the early 1990s.”
Broadview doesn’t have a significant stake in the current fund, the firm’s second which closed on $240m in 2000. The fund now has a capitalisation of $205m after Broadview reduced its commitment to $15m. “Broadview still has a stake in the fund’s carried interest and will also continue to provide Kennet with access to dealflow and existing relations will be retained,” added Elias. The firm will also continue to be based at Broadview’s offices in London and Silicon Valley.
Kennet said that investors in the two Kennet funds, including Harbourvest, Bank of America, Swiss Re, Swiss Life, and Allianz, were in support of the demerger.