HSBC Private Equity sets up £108m technology fund

HSBC Private Equity has launched a £108m fund for investment in high growth opportunities in the technology, media and telecommunications sectors. The vehicle has been set up as a discrete entity comprising commitments from existing investors in the HSBC Private Equity Partnership Scheme. Andy Thesen, a director of HSBC PE, heads the initiative alongside investment managers Dan Alexander and Mahmoud Atalla. Thesen has been with HSBC PE for 10 years, while Alexander and Atalla joined just last year to focus specifically on investments in the technology sector. Alexander joined HSBC PE from Robert Fleming’s Russian Venture Capital fund, where he spent three years, while Atalla, who is a product of HSBC Investment Bank’s graduate training programme, moved from the bank’s corporate finance and advisory unit.

So far, the fund has made four investments and provided two follow-on rounds. Investee companies include: Fuel IT, an e-learning business for the IT sector, which received funding in October 2000; Pocket IT, a Norwegian provider of location-based services for wireless internet applications, which received rounds of funding in June 2000 and December 2000; Ecoss, a Japanese company that develops software for companies to become web-enabled (a deal led by HSBC in Hong Kong alongside HSBC PE in London); and Searchspace, a provider of software that automates key operational business processes through artificial intelligence technology, which recently received a second round of funding.

It is understood that the fund is benefiting from strong deal flow generated by the retail, corporate and investment banking franchises of the HSBC Group worldwide, as well as from its network of technology intermediaries. Thesen comments that the fund is benefiting from the drop in valuations that has resulted from the market gloom with regard to the technology sector. The fund will invest in both early and later stage development situation, backing strong management teams, in return for minority equity stakes.

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