Investcorp Technology Partners raises $500 million fund

28 Jan 2008

Investcorp Technology Partners (ITP), a buyout investor in growing, small- and medium-sized technology businesses, today announced the closing of its Investcorp Technology Partners III, L.P. (ITP Fund III), with $500 million in total committed capital. ITP’s total accumulated assets under management today stand at more than $1 billion.

ITP Fund III, which had an original target of $400 million, was well oversubscribed and exceeded the $300 million total capital committed to Investcorp Technology Ventures II, L.P., ITP’s second fund, which closed in 2005.  ITP Fund III received strong support from a diverse group of institutional, individual and family trust investors globally in addition to a significant financial commitment from Investcorp.  In the United States, investors included Grove Street Advisors for the California Public Employees’ Retirement System (CalPERS), Cornell University, the Doris Duke Charitable Foundation, QVT Financial LP and Broward Health; in Europe, investors included AlpInvest Partners, Bank of Scotland, CNP Assurances SA and UBS Sauerborn.  ITP’s own team committed more than $11 million to the fund.

Investcorp Technology Partners focuses on three types of transactions – buyouts, corporate carveouts and public situations (take-privates and control-oriented PIPEs) – in four key areas of the technology market: Mobile Data Applications, Enterprise Software, Communications Infrastructure and Digital Content Enablement.  The group focuses on generating the majority of the value creation in its investments by working with portfolio company management teams to increase revenues and gross margins and improve operational efficiency.

Head of Investcorp Technology Partners, Savio Tung, together with Hazem Ben-Gacem and Alex Guira, constitute ITP’s management.  Mr. Tung said, “We experienced extraordinary demand for ITP Fund III, reflecting our team’s consistent execution of our strategy over two funds, and our accumulation of an exceptional track record in 14 fully and partially realized investments over the past six years.  Investors also have noted that ITP stands apart in its focus on creating value by generating growth and operational improvements at portfolio companies, rather than depending on significant leverage – a quality that we believe will continue to serve us well in the current lending environment.  We are gratified to have received such strong support from new and existing limited partners.”

Selected ITP Investments
ITP has extensive carveout, buyout and public transaction experience in the U.S. and Europe, including through such investments as:

Dialogic Corp. – In partnership with Eicon Networks, ITP carved out Intel’s Media & Signaling business in September 2006, forming Dialogic Corp.  ITP helped execute the complex transaction in a compressed time frame, leading the $35 million equity round and arranging $65 million in additional financing.  Since the carveout, Dialogic has acquired a competitor and established itself as the leader in its market, providing multimedia and signaling processing engines to the converged communications market for applications such as voice, fax and video. 

Zeta Interactive Corp – In July and November 2007, ITP acquired Zustek, a provider of e-mail marketing solutions, and Adverb Media, a full-service interactive marketing agency.  The merger of these companies formed Zeta Interactive Corporation, a leading provider of a wide range of digital services including e-mail, search, website development, creative and business intelligence to help enterprise marketers realize the full potential of the Internet to build brands, improve processes and reduce costs.

“In the current environment, we continue to see an increasing number of carveout and buyout opportunities involving growing small- and medium-sized technology businesses,” said Mr. Tung.  “These opportunities are being driven by numerous factors, including the global technology sector’s continued expansion, and the focus by large technology conglomerates on core competencies.”