IP Group launches second venture fund worth £30m

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YORKSHIRE’S top academics could soon have more opportunities to turn their ideas into businesses.

The IP Group yesterday revealed that it had established a £30m venture capital fund, IP Venture Fund II, in partnership with the European Investment Fund.

The IP Group turns university research into business. The commercialisation group has exclusive deals with a number of universities, including Leeds and York

IP Group has backed a number of successful Yorkshire-based university spin-outs, including Avacta, from Wetherby, which designs and makes devices to speed up and reduce the cost of drug development and sample analysis.

The IP Venture Fund II will invest alongside IP Group in new spin-out companies from the IP group’s university partnerships, and other collaborations.

The creation of the fund follows the success of its predecessor, IP Venture Fund, the IP group’s original £31m fund with the EIF, which was created in 2006.

To date, IP Venture Fund has invested £21m into 26 of the group’s portfolio companies.

IP Venture Fund II will be managed by Top Technology Ventures Limited, which is the FCA authorised venture capital fund management subsidiary of IP Group.

Alan Aubrey, the chief executive of IP Group, said yesterday: “We are delighted to have agreed a second fund with the EIF.

“It is a key partner for the group they share a similar view on the importance of providing long-term patient capital to intellectual property commercialisation.

“Finding like-minded partners to invest alongside us remains an important component of our model; ensuring our most promising companies have access to patient capital as well as delivering value to both shareholders and partners.

“We are very much looking forward to our expanded relationship with the EIF.”

Piyush Unalkat, the principal, for equity investments, with the EIF, said yesterday: “We have been working with IP Group since 2006 and have been impressed by the group’s ability to build valuable companies from the best of British intellectual property and evidence returns to co-investors and shareholders. We look forward to creating the next generation of spin-outs with the new fund.”

The IP Group develops technology innovations, primarily from its “research intensive” partner universities.

The group offers more than just traditional venture capital.

It provides access to business building expertise and business support.

The company has holdings in more than 70 companies, including Oxford Nanopore Technologies, the DNA sequencing development company, and Revolymer, which is best known for its removable chewing gum.

It also has a holding in Rotherham-based Xeros, which has received accolades for its revolutionary clothes washing techniques.

Fifteen of the portfolio companies supported by IP Group have gone on to list on the AIM (Alternative Investment) market of the London Stock Exchange, and one has listed on ISDX.

Founded in 2001, IP Group listed on AIM in October 2003, and moved to the official list in June 2006.

EIF supports Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital, guarantees, and microfinance instruments which target this market.

EIF’s total net commitments to private equity funds amounted to more than 6.9bn euros at the end of 2012. With investments in more than 435 funds, EIF is a leading player in the European market.

It has a particular focus on technology and early-stage companies.

greg.wright@ypn.co.uk