Vintage Ventures, a secondary purchaser of technology investments, has closed $65 million for its first fund.
The fund, part of the Dovrat Group and managed by Alan Peled, focuses on acquiring limited partnership interests in venture capital funds and direct interests in technology companies. Vintage completed its fund-raising within a year, having raised $30 million in the first round in June 2003, and has so far made five purchases of holdings in Israeli venture capital funds.
Peled, who set up Vintage after being a partner in several Israeli VC funds, including Vertex and Israel Seed, says among investors in Vintage are local insurance companies, foreign firms, American funds of funds, and private investors from Israel and overseas.
Aharon and Shlomo Dovrat provided the principal backing for Peled to set up the fund and are the largest local investors in Vintage. .
In the past year, several foreign players attempted to enter the secondary fund market in Israel, among them Paul Capital and Coller Capital, two of the largest in the field worldwide.
However, Peled claims the two local funds in the secondary market - Harvest of the Evergreen group, which raised $90 million in the past year, and Vintage - have not been troubled by strong overseas competition. "The market is big enough for two local players," he says, "but not big or attractive enough for large foreign players used to deals of hundreds of millions of dollars. There are no deals like that here."
Peled believes the local market has weathered the storm of the past years better than elsewhere. "The Israeli funds have not lost like their U.S. counterparts because they did not invest in Internet companies or other bubble firms, but then they also didn't make large profits like the U.S. funds, either."