Gemini Israel Funds has raised $170 million for its fourth fund, which will probably total $200 million.
Two weeks after Pitango Venture Capital raised $300 million from foreign investors, Gemini, which mainly invests in seed-stage companies, has also raised a fund solely from foreign investors. Founded in 1993, Gemini's partners included president and co-founder Ed Mlavsky, Yossi Sela, Adi Pundak-Mintz, Tali Aben, Lior Berger, and CFO David Cohen. Its investors include Advent International Corp., BellSouth (NYSE:BLS), Invesco, Bear Stearns (NYSE:BSC), the BellSouth (NYSE:BLS) pension fund, California Public Employees Retirement System (CalPERS), Telstra (NYSE; ASX:TLS), Telecom Italia (NYSE:TI), Tyco International (NYSE:TYC), Silicon Valley Bank, Massachusetts Institute of Technology's (MIT) investment fund, Wellcome Trust, Migdal Capital Markets, Gmulot, Bank Hapoalim (LSE:BKHD; TASE:POLI), Alrov (Israel) (TASE:ALRO), Bank Leumi (TASE:LUMI) and United Mizrahi Bank (TASE:MZRH). Many of the institutional investors invested in the fourth fund, including $20-25 million by CalPERS.
Figures about Gemini's performance in CalPERS' annual report did not deter it from investing a larger sum in Gemini's new fund. CalPERS reported that it had not yet earned a return on its $1.37 million investment in Gemini. The fund posted a minus 17.60% internal rate of return. Gemini's investment multiple is currently 0.65, which means that CalPERS has written off 35% of its investment in Gemini to date.
The CalPERS previous annual report states that Gemini lost $38 million on paper out of $110 million invested, but added that Gemini was Gemini was its best Israeli investment. The internal rate of return was minus 14% and the investment multiple was 0.79, amounting to a $19 million write-off on $90 million in investments.
Venture capital sources said Gemini was able to raise the money easily, thanks to the services and connections of Grove Street Advisors managing partner Clinton (Clint) P. Harris. Grove Street Advisors manages CalPERS.
Gemini declined to comment on the report.
Published by Globes [online] - www.globes.co.il - on August 3, 2004