Delta Partners believes equity fund could raise up to €150m

Venture capital firm Delta Partners believes its Delta Equity Fund III could ultimately raise up to €150 million.

Delta announced yesterday the first closing of the fund at €100 million, which included a €15 million investment from Enterprise Ireland under its Seed and Venture Capital Scheme 2007-12.

Dermot Berkery, a partner with Delta, said the firm ultimately hoped to close the fund out at €120-€150 million.

Delta has also became the first Irish VC fund to get backing from the National Pensions Reserve Fund (NPRF), which invests 1 per cent of Gross Domestic Product annually in order to fund public sector and social welfare pensions from 2025 onwards.

"It's great to be the first," said Maurice Roche, a partner with Delta. "Now that the NPRF has done its due diligence and decided to invest we hope to be able to attract other Irish pension funds."

Delta plans to make about 30 per cent of its investments in the UK with the remainder in Ireland.

Mr Roche said the firm would increasingly focus on the medical devices sector in addition to areas such as software, business services, internet and semiconductors in which it has traditionally invested. He said medical devices could account for as much as 30 per cent of the current fund.

Delta Equity Fund III will have a 10-year life. Mr Berkery said Delta typically looks to exit after about six to seven years as it is usually an early stage investor in portfolio companies.

He said it was likely that about 80 per cent of exits would take the form of a trade sale, typically to publicly traded US firms.

Although he conceded that the market for venture capital fundraising was tougher given the returns being boasted by private equity buy-out firms, Delta completed its fundraising in just six months according to Mr Berkery.