Southern California venture firm Rustic Canyon Partners has sold stakes in 27 portfolio companies to secondary direct investment firm Saints Capital for an undisclosed amount to provide liquidity to the firm’s largest limited partner.
“This is not just because of the current market,” Rustic Canyon managing partner Tom Unterman told PEO, adding that Rustic Canyon began facilitating the sale process with the LP last Spring.
Rustic Canyon sold its entire position in 19 portfolio companies from its $550 million debut fund. The companies include customer relationship management software company Astea International, kitchen products retailer Cooking.com and copyright licenser iCopyright.
“The first fund is almost 10 years old and there's a number of companies in it that we wouldn't be able to exit from this year,” Unterman said.
The firm also sold 20 percent of its stakes in eight companies from its $180 million second fund, which includes optical network company Capella Photonics, biofuel producer Fulcrum Bioenergy and learning and performance consultant Intrepid Learning Solutions.
Rustic Canyon was established in September 1999 to invest a portion of the funds created by a recapitalisation of newspaper group The Times Mirror Company, which was acquired by the now-bankrupt Tribune Company in 2000 for $8.3 billion.
The firm’s debut fund has a single LP, which remains the largest backer of Rustic Canyon’s second and third fund. Fund II, which closed in 2003, also is backed by the US government’s Small Business Investment Company. Fund III closed on roughly $210 million this past October.
Rustic Canyon has invested in approximately 50 companies to date in the internet and media, clean technology, technology-enabled process outsourcing, information services and wireless and wireline broadband sectors.
Saints Capital is a direct secondary acquirer of venture capital and private equity investments globally and also makes direct venture investments on a primary basis in the US.
San Francisco-headquartered Saints closed its sixth fund on $300 million in March. In conjunction with the close, the firm acquired stakes in six “legacy partner companies” from publicly traded venture firm Safeguard Scientifics.