Investcorp, the global investment group that specializes in alternative investments, today announced two further successful exits, over the past month, of investments from its Investcorp Technology Ventures Fund I: PortalPlayer and Utimaco. Total net proceeds from these realizations were nearly $70 million, providing clients with an exceptionally high multiple on their original investments.
Technology investment is Investcorp’s venture capital business managing about $500 million in two funds. It is one of four alternative investment offerings alongside private equity, real estate and hedge funds.
PortalPlayer and Utimaco are the latest in a line of profitable realizations from Investcorp’s Technology Ventures Fund I. During Fiscal 2005, the technology investment unit had already achieved four other highly successful realizations for the Fund, including the original IPO of PortalPlayer. With these exits, Fund I will have returned approximately 60% of its committed capital to investors, placing Fund I in the top quartile for venture capital funds of the 2000/2001 era.
PortalPlayer, based in California, designs semiconductors and software for digital music players. In particular, PortalPlayer sells to manufacturers in Asia who are believed to use its technology in the highly successful Apple iPod. Investcorp was one of the lead investors in PortalPlayer, originally investing in 2002. PortalPlayer currently has a market capitalization of over $600 million.
Utimaco, based in Germany, makes security software to protect the electronic data of companies and government bodies against unauthorized access. Investcorp led an investment in Utimaco in 2003 when the company traded at a market capitalization of under €10 million.
Utimaco is traded on the Frankfurt Stock Exchange and currently has a market capitalization of over €100 million.
Commenting on the year’s achievements, Savio Tung, head of Investcorp’s technology investment group said: “This was another successful year for our technology venture capital investment strategy. We have seen a record number of profitable exits, and strong growth and development from companies in Fund I. Going forward, we plan to continue to build on this success as we are seeing a many good opportunities that fit our investment criteria.”
Investcorp’s technology investment group targets later stage growth capital transactions and venture buyouts of subsidiaries of major telecom and technology conglomerates. The group focuses on investing in later stage IT and telecom related companies in North America and Western Europe, operating in four major sectors: wireless data, enterprise software, communications infrastructure and digital content enablement. Investcorp seeks companies with experienced management teams that can demonstrate strong growth prospects, sustainable competitive advantages and innovative products.
“The year’s record performance has been the direct result of this highly selective investment strategy backed with active management of our technology assets,” Savio Tung concluded.
ABOUT INVESTCORP
Investcorp is a global investment group with offices in the Kingdom of Bahrain, London and New York. The Firm has four lines of business: private equity, real estate investment, hedge funds and venture capital. It was established in 1982, and now manages total investments in alternative assets of around $9.5 billion.
Investcorp announced a net income of $110.3 million for the fiscal year ended June 30, 2005, an increase of 22 percent over the previous year. Income before operating expenses, at $324.7 million, was a record achievement for the Firm.
