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California’s Horizon Ventures completes secondary fund sale

15 Feb 2012

Californian venture firm Horizon Ventures has sold its interest in Horizon Ventures Fund II, previously owned by the U.S. Small Business Administration (SBA) to two secondary investors.

Secondary specialist Industry Ventures, a new limited partner in Horizon Ventures, was the majority investor in the transaction and was joined by Tokyo-based Ant Capital, an existing limited partner, the firm said.

Horizon’s most recent fund, Horizon Ventures Fund II, was formed as a Small Business Investment Company (SBIC) and Horizon was licensed by the SBA in 2004. The SBA became a Preferred Limited Partner in the SBIC and supplied over $50m from 2005 to 2009.

In May 2011, the SBA insisted they be named a receiver for the fund and filed a civil suit in San Jose District court. In August 2011, that dispute was resolved via a forbearance agreement whereby, among other things, the SBA agreed to permit Horizon Ventures II to seek a secondary buyer for SBA’s interest.

“We are very pleased to welcome Industry Ventures as a new preferred limited partner in Horizon Ventures Funds and look forward to working with its experienced investment team,” said Jack Carsten, managing director of Horizon Ventures.

“Industry Ventures’ track record in secondary private equity opportunities and focus on technology investments uniquely qualifies them to help us achieve our objectives,” he added.

As part of the investment two members of the Industry Ventures team will join Horizon Ventures’ advisory board, as will Reijiro Samura of Ant Capital.

Horizon Ventures has$150m in private capital under management, based in Los Altos, California. The firm invests in data and telecom systems, wireless networks, enterprise and technical application software, Internet tools and infrastructure, and semiconductors. Their current portfolio includes Applied MicroStructures, Discera, Invivodata, iWatt, Sensys Networks, Toolwire and WhiteHat Security, all located in the San Francisco Bay area.

Industry Ventures acquires direct equity portfolios, founders’ interests, tail-end funds, limited partnership interests, and other special situations.

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