Pentech raises £45m for Fund II

The UK software-focused venture firm has closed its second fund on nearly double its £25m target after 10 months in the market.

Pentech Ventures has closed its second UK-focused early stage tech fund with £45 million (€56 million; $79 million) in commitments.

Launched in November 2007, the fund will invest in companies across the UK and Ireland in the enterprise software, telecoms software, internet, mobile, embedded applications and tech media sectors.

The firm said it closed the fund above target, having attracted “strong support” from existing limited partners including Souter Investments, F&C Private Equity Trust, the European Investment Fund and the Scottish Widows Investment Partnership.

Scottish Widows invested £5 million in Pentech’s first fund, which closed on roughly £22 million in 2002. It was the first private equity fund to which the asset manager had ever committed.

Pentech II also garnered commitments from new investors including fund of funds Alliance Trust, Innotech Laminvest and the UK’s National Endowment for Science, Technology and the Arts.

Alliance Trust Equity Partners managing director Raymond Abbott said in a statement that Pentech’s team has “a strong niche focus with a real understanding of the technology they invest in, excellent links with Silicon Valley, and a strong blend of investment and operational experience”.

Pentech’s debut fund invested in 11 companies, three of which have been exited.

The firm was founded by Eddie Anderson and David Armour, a former partner in corporate advisory firm AMCo.