VersoVentures has established a new EUR 50 million private equity fund that focuses on investing in businesses or technologies spun off from larger corporations. The fund creates new independent growth companies across several industrial segments by investing in businesses with revenue in the range of EUR 1-30 million.
The Investors in the fund’s first closing are European Investment Fund (EIF), FoF Growth II, Ilmarinen Mutual Pension Insurance Company, Finnish Industry Investment Ltd and AI-Partners Ltd. VersoVentures invites other investors to join the new fund in the next phase of fund raising, and targets a final closing with up to EUR 75 million by mid-2015.
Unique investment focus: turning non-core businesses into new growth companies
The new fund invests in businesses that are not living up to their full potential in their current environment, and accelerates the growth of the businesses by spinning them off into new independent companies. VersoVentures has developed methodology to speed up and simplify the carve-out process while reducing carve-out costs. VersoVentures then actively supports the new growth companies to achieve international success.
Investment sources can include non-core businesses, companies that reuse corporate technology in new customer segments, or businesses that for any reason cannot live up to their full potential inside a larger organisation. Another example of potential investments for the new fund are businesses that in larger M&A transactions do not fully fit the buyer’s strategy.
The fund invests in spin-off businesses throughout Europe
“Finnish and European corporations continuously develop new products and businesses but not all of them can be developed further inside the corporation. We believe we can create new international growth companies by spinning off businesses from corporations, increasing the resourcing as needed and focusing on the needs of the business as an independent company. During the past year we have contacted more than 70 technology companies in Finland and in almost all of them we have found potential targets to cost efficiently spin out smaller businesses into new independent companies”, says Anssi Kariola, Managing Partner of VersoVentures.
”VersoVentures has created a unique new concept in Europe, serving the very attractive market segment that is hard to penetrate for traditional venture funds. The European Investment Fund wants to ensure the capability of spin-off companies to get funding in Europe and we believe Verso Ventures has the potential to become a partner of choice for European corporates and a successful spin-off specialist venture fund”, says Tatiana Issaeva, Investment Manager in the European Investment Fund.
”We believe businesses matured inside larger entities can be moved to more agile environments. VersoVentures operates in this segment and has excellent capabilities to create profitable growth businesses from these spun-off entities”, says the Chairman of the Investment Board of FoF Growth II, Director Esko Torsti from the Ilmarinen Mutual Pension Insurance Company.
”We are pleased to participate in establishing a new solid and capable team to create new interesting investment opportunities, and believe the team has the right know how to succeed in this segment”, says Riitta Jääskeläinen, Investment Director at the Finnish Industry Investment Ltd.
More Information:
Managing Partner Anssi Kariola, VersoVentures Oy, +358 50 589 0520, www.versoventures.com
Investment Director Riitta Jääskeläinen, Finnish Industry Investment, +358 50 309 2733, www.industryinvestment.com
About VersoVentures
VersoVentures is a private equity company that invests in international growth companies created by spinning off businesses that are not living up to their full potential inside large corporations.
VersoVentures is an active investor: VersoVentures creates value by helping define the right building blocks for success in the carve-out process, shapes and supports the team for success, and actively accelerates the international growth of the new company with their experience and networks.
VersoVentures works actively with the management team of the business as well as the corporations, improving the chance of success and financial benefits for both the new company, for the corporation, and for VersoVentures’ investors.