Millennium hits $280m hard-cap

The direct VC secondaries investor had $400m of interest from investors for its second fund.

Millennium Technology Ventures, which spun out of The Blackstone Group 10 years ago, has hit the $280 million hard-cap for its second “Millennium Technology Value Partners” fund. The fund attracted $400 million of interest from investors. Its predecessor, which employed the same direct venture secondaries strategy, closed on $130 million in 2006.

The firm's approach “gives companies control about how, when and why liquidity is provided, and gives shareholder a chance of getting liquidity that’s customised to their needs”, managing partner Sam Schwerin told PEO. Limited partners' appetite for the fund has vindicated the firm's approach, he said. “What we found in the fundraising process was that institutional investors were increasingly sophisticated as it related to secondary investing.”

Shareholders of private companies need and appreciate the opportunity for liquidity in all phases of the market.

Dan Burstein

The firm began marketing Fund II in 2009, holding a first close in the first quarter of last year. Its limited partners include the duPont Testamentary Trust, the Los Angeles Fire and Police Pensions, Fairview Capital Partners, Grove Street Advisors, AMP Capital Investors and Siemens Global Innovation Partners. Roughly two-thirds of the LPs are from North America.

Millennium, which used its prior fund to invest in companies including online shoe retailer Zappos, dating site eHarmony and social networking giant Facebook, averages roughly 16 individual investments per portfolio company. Schwerin declined to comment specifically on investments being made for Fund II, but said a number have already been warehoused.

Though the current fund is tagged with the Roman numeral “II”, it is technically Millennium’s fifth fund. The firm has raised three traditional VC funds and was founded by former Blackstone executive Dan Burstein after having run some traditional, early-stage VC funds from within Blackstone in the late 1990s. Though not Blackstone-branded funds, they were invested in by the private equity giant’s senior management and Blackstone co-founder and senior chairman Pete Peterson remains one of Millennium Technology Venture’s special limited advisory partners.

“Whether it was the tech bust of 2001-2, or the boom of 2006-7, or the recent financial crisis, we have seen that shareholders of private companies need and appreciate the opportunity for liquidity in all phases of the market,” Burstein said in a statement.