Lexington, Massachusetts-based Windspeed Ventures has agreed to manage the venture capital portfolio of former information technology company Comdisco.
Under the terms of the agreement, Windspeed will provide their management services, operational support, and capital for follow-on investments.
Comdisco emerged from bankruptcy protection in August 2002 with a mandate to liquidate all assets. The company’s equity and warrant portfolio, which according to news reports is valued at approximately $800 million, comprises investments in more than 250 software, communications, telecommunications, biotechnology and healthcare companies.
But instead of placing its portfolio holdings on the secondaries block, Comdisco chose to divest their investments through this special arrangement.
“Our desire is to help the corporation in liquidating their portfolio with this alternative,” Windspeed general partner and chairman Daniel Bathon said. “This way, they don’t have to sell their portfolio at a fraction of a dollar.”
Though the agreement removes Comdisco’s need to manage and administrate their portfolio, Windspeed still has the option of making additional equity investments in the portfolio under a separate limited liability company also managed by the firm. Comdisco will get back the bulk of proceeds from their current portfolio, and Windspeed will receive all additional realizations from any follow on funding, in addition to management fees.
Windspeed Ventures invests in companies in the telecommunications infrastructure, software and communications sectors. The firm manages approximately $25 million in capital in its 1999 seed-stage fund and a second fund closed in 2002 focused on majority interest acquisitions.