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After less than half a year on the fundraising trail, Battery Ventures closed its ninth fund, Battery IX, at $750 million, the Waltham venture capital and private equity firm reports.
As of last week, the new Battery fund had reached $709 million, the firm reported in regulatory documents.
At its final close, Battery IX is equal in size to Battery VIII, which closed in July 2007. However, it does not include an annex fund, such as the $250 million annex the firm added to support larger-than-normal deals in fund VIII, bringing the fund’s total available capital to $1 billion. Battery has no plans to add an annex to its fund IX, general partner Morgan Jones said. Instead, the firm will back all but the most outsize investments out of its main fund, seeking syndicated partners on checks over $100 million, he said.
Other than that, expect more of the same from Battery, Jones said.
“It’s more of the strategy that we’ve used that’s worked. We’re investing from startups all the way through late-stage companies and take-private opportunities,” he said, adding that the firm expects the fund to split about evenly between companies that are pre-revenue, and those that are already earning revenue at the time Battery invests. In both areas, the firm plans to continue to heavily pursue new investments in the Boston area, where its largest office is located, Jones said.
Last August, Battery let go two Asia-focused investing partners — general partner Mark Sherman and managing director Gautam Patel. Patel’s departure left only one Battery partner in the firm’s Mumbai, India, office. Jones said the firm plans to maintain its relatively slow pace of investment in Indian companies. “We’re looking for deals, but we’re doing them at a fairly modest pace compared to our other geographies,” he said.
Battery drew return participation from 85 percent of its limited partners for its ninth fund, the firm reported. The remaining 15 percent was diverse but included an increase in the firm’s international limited-partner investors, Jones said.
Some of the limited-partners who did not return to Battery were unable to because of constraints on their allocation to the alternative asset classes the firm represents, Jones said. “The recession of 2009 did put a few into dire straits.”
On the other hand, caution in the marketplace led to some limited partners seeking to increase their allocation with a concentrated number of high performers, which redounded to Battery’s benefit, Jones said. “We heard a number of our LPs describe that they were reviewing where they had investments and were intentionally and sort of proactively going to narrow that list and really focus on the ones they thought were able to give the best returns,” he said. “Folks wanted more allocation with us because we were on that shortened list.”
Battery VIII continues to make new investments. Although Jones declined to disclose a dollar amount remaining available for new investments, he said. The firm expects to make its last fund VIII investment by late summer or early fall and begin making new investments from fund IX at that time.
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