Connection Capital, the specialist private client investment business, has secured an opportunity for private investors to participate in a tech-focused venture capital (’VC’) fund managed by top quartile, VC fund manager, DN Capital – the third time it has done so in four years. Appetite has been strong with over £7m raised from private clients.
- DN Capital’s previous portfolio winners include unicorns Shazam and PurpleBricks and ‘decacorn’ Auto1
- European and US focused VC funds can be difficult for private investors to access
Connection Capital clients were able to access the €200m fund-raise for DN Capital’s Global Venture Capital V Fund (‘GVC V’) and invest in units of just £25,000 rather than the standard €1m for individual investors.
GVC V targets future market-leaders at seed or Series A investment stage in software, fintech, online marketplaces, and consumer internet sites/applications across the UK, Europe and US. The Fund is already showing an uplift in value to cost from the portfolio investments made to date, which include online money transfer service Remitly and online private tutoring company GoStudent.
DN Capital’s track record of picking early “winners” includes previous fund investments in music app Shazam, online estate agent PurpleBricks, and digital automotive platform Auto1, whose IPO earlier this year saw it valued at €11bn.
Founded in 2000, DN Capital is one of the most established VC firms in Europe, and has offices in London, Berlin and Silicon Valley, with €700m of assets under management. Its first three mature funds are showing an internal rate of return (IRR) of 32% and a 3.6x return on invested capital (source: DN Capital).
Although VC funds with a European and US focus can be difficult for private investors to invest in, ConnectionCapital is able to provide access because it has built up an excellent relationship with DN Capital and by establishing special purpose vehicles which act as an institutional investor on clients’ behalf.
Connection Capital clients previously also invested in GVC III and GVC IV, which are both performing well, with GVC III recently delivering a fund returning distribution after realising part of its stake in Auto1. This fund has been ranked number three within the European 2003-2015 vintage funds by data provider Prequin, although its ranking is likely to be pushed up even higher since the Auto1 IPO.
Lorna Robertson, Head of Funds at Connection Capital, comments, “DN Capital has an enviable and fully-deserved reputation for picking big winners early, having backed several start-ups that have gone on to become unicorns/decacorns and/or household names in the last few years.”
“Our model and our long-standing relationship with DN Capital means we have been able to open the door to this asset class three times in just four years via this top-performing manager.”
“It’s an exciting time for investors in the venture industry. The rate of change happening in technology and consumer markets today is creating a huge opportunity to build companies which can become leaders in their chosen niche very quickly, often with global reach and attracting impressive valuations.”
“Tech stocks have held up well in the face of the Covid-19 pandemic and the trend for rapidly growing new digital business models looks set to continue, keeping prospects for further investment rounds and exit opportunities buoyant.”
“DN Capital’s deal pipeline continues to go from strength to strength, thanks to the extensive network of contacts it has built up and the high regard in which it is held in the European VC space, both by the investor community and by founders.”
About Connection Capital
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £320 million of funds under management across a diverse portfolio.
Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.
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