Investcorp Technology Investment Group raises $300 million fund

The Fund was well oversubscribed at its original target of $250 million, and hit its cap at $300 million.

Investcorp's Technology Investment Group (TIG) focuses on venture buyouts, corporate spinouts and growth capital/expansion stage financing in the technology sector. ITV Fund II will make investments in technology driven companies -- primarily in the United States, and selectively in Western Europe -- with established products, a growing revenue base, and near-term profitability.

The team investing in ITV Fund II has already produced top-quartile returns, measured against industry peers, with its Investcorp Technology Ventures Fund I, L.P. (ITV Fund I), which was launched in June 2001 with $210 million in committed capital. Of the 16 investments initiated by the team, seven have been fully realized. In ITV Fund II, TIG will continue to seek transactions that many traditional venture capital and technology focused investment firms often avoid due to their complexity, such as "take-private" investments and divisional spinouts of larger companies.

Savio Tung, Head of Investcorp's Technology Investment Group, said:

"ITV Fund II received strong support, and we have had very active participation in the new Fund by our traditional investors. In addition, we have a diverse group of new limited partners from North America, Europe and Asia in our first formal offering to these markets."

This new group of institutional, individual and family trust investors includes Grove Street Advisors in the United States and AlpInvest Partners and UBS Sauerborn in Europe.

"We believe the commitments to the new ITV Fund II result from the strong performance of ITV Fund I, but also show that investors recognize that we have a particular competitive advantage," said Mr. Tung. "Investcorp's Technology Investment Group takes a disciplined approach, applying to venture investments the due diligence capabilities often associated with buyouts. In addition, as part of our pre-investment due diligence, we focus on potential exit opportunities from day one of our investment. Working as one team across the Atlantic, we have an integrated, global approach and can be opportunistic in sourcing the most suitable transactions from both North America and Western Europe."

Current ITV Fund II Investments

To date, TIG has completed three investments from ITV Fund II, bringing the total amount invested to approximately $30 million:

• Magnum Semiconductor, Inc. -- In June 2005, TIG formed Magnum Semiconductor from a spinout of Cirrus Logic's digital video product line. TIG led the asset sale with a $12 million investment. Based in Milpitas, California, in the United States, Magnum Semiconductor develops digital video integrated circuits for consumer applications such as DVD recorders, camcorders and network media adapters. In addition to DVD recorder chips, Magnum Semiconductor also provides sophisticated software that controls recorder functions, administers Digital Rights Management protection and operates the user interface. August Capital is a co-investor.

• Trema Holding N.V. - In February 2005, TIG invested approximately $11.5 million as part of a growth-capital investment in this leading provider of treasury and cash management software solutions to central banks, treasury departments of Fortune 500 companies and asset management firms. Incorporated as a Dutch holding company, Trema is based in Sophia-Antipolis in France. Co-investors include ABS Ventures, Carlyle Europe Venture Partners and Norsk Vekst.

• PanGo Networks, Inc. - In October 2005, TIG invested $6 million as the lead in an expansion-stage round of funding, which included existing co-investors Columbia Capital and IDG Ventures. Based in Framingham, Massachusetts, in the United States, PanGo develops and sells a middleware software platform used to track assets via wireless networks.

Pending ITV Fund II Investments

• Mania Technologie AG - In October 2005, TIG announced the signing of a definitive agreement to invest approximately $20 million in the recapitalization of this Frankfurt Stock Exchange-listed company, which is a global leader in the printed circuit board industry, providing test equipment as well as outsourcing services.

ITV Fund I: Selected Exits

TIG has achieved successful exits for a significant number of its Fund I investments via both the capital markets and sales to strategic acquirers. Examples include:

• ObjectStar International Ltd. - The company, a developer of a legacy integration software platform, was a TIG spinout of a non-core division of Fujitsu in 2003. TIG arranged the company's sale to TIBCO Software Inc. in March 2005.

• PortalPlayer, Inc. - TIG's 2002 investment in this developer of chips and firmware for digital media devices was fully exited through a sale of shares in August 2005, following a November 2004 IPO.

• Spectel plc - This developer of application platforms for conferencing providers, in which ITV invested in 2002, was acquired by Avaya in October 2004.

• Utimaco Safeware AG - TIG invested in this software-based IT security solutions provider in a September 2003 PIPE transaction. By September 2005, the investment in this Frankfurt Stock Exchange-listed company was fully realized via a sale of shares.

• Willtek Communications GmbH - This developer of wireless test and measurement equipment was an ITV spinout from Acterna in 2003. Willtek was sold to Wireless Telecom Group in June 2005.