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| Evergreen raises more for fourth fund | Published by: Globes
www.globes.co.il
Batya Feldman
06/04/2009
| The Evergreen IV Fund only makes follow-on investments in promising portfolio companies.
Sources inform ''Globes'' that Evergreen Venture Partners recently closed a $20 million annex for its fourth fund, which was raised in 2002. The Evergreen IV Fund now has $163 million under management, including the annex.
Jacob Burak and Yaakov Neeman founded Evergreen in 1987. It currently manages five funds. The Evergreen V Fund raised $200 million in 2006.
Evergreen general partner Erez Shachar said that the annex was raised from the fund's current investors, and that a major effort was made to avoid conflicts of interest between investors in the Evergreen IV Fund who did not participate in the fundraising for the annex and the investors who did.
Shachar added that Evergreen worked hard to find a formula that would minimize the harm to previous investors in the fund on one hand, while not causing the new investors to feel harmed on the other.
"Globes": That sounds rather like trying to square a circle.
Shachar: "We learned from previous crises and from the previous cycle of fundraising for annexes for funds held in 2001 and 2002 that the problems are a conflict between the current investors in the fund and the investors in the annex. The new investors ostensibly invest in part of the portfolio, and the previous investors who invested in all the portfolio companies are less pleased. In order to prevent a conflict between the current investors and the new ones, we decided to increase the fund so that the capital raised now would go into the fund's general pool. In this way, both the new and the old investors will be partners on an equal footing."
Who are the new investors?
"All the investors in the annex are investors who previously invested in the fund and decided to supplement it. Although not all the investors could join, those who did join were investors in the Evergreen IV Fund."
The Evergreen IV Fund no longer invests in new companies, and all its available capital is channeled to its portfolio companies as follow-on investments and to keep the fund's proportionate holding in the companies whose future it believes in.
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