Catalyst Fund Management (Catalyst), the UK-based venture capital firm, has commenced the marketing of a second financial fund, and is hoping to raise between £40m and £70m.
The fund, which will be aimed solely at institutional and previous investors, will target investments in fast growing businesses developing services for the European finance industry, a sector which the firm believes is underinvested by European venture capital firms.
Catalyst was established in 1997 and closed the European Financial Services Venture Fund (EFSVF) at £40m in June 1999 and now has eight companies in its portfolio including processing software firm Future Dynamics and SpiritSoft, a Java messaging applications provider. The firm has eight companies in its portfolio. Investors in Catalyst’s first fund include BancBoston Capital, Credit Suisse and CDC IXIS Asset Management.
Tim Farazmand, who recently joined from Royal Bank Private Equity to become Catalyst’s chief investment officer said he believed the current environment presented great opportunities in a market where valuations had fallen sharply. “It is hard to imagine a better environment for VC investment in [the financial services] sector.”