Leading private equity firm may set up base in Republic

Doughty Hanson & Co, one of the world's largest private equity firms, may establish a base in Dublin to evaluate venture capital investments in local technology firms, according to its managing director, Mr George Powlick.

Mr Powlick, co-head of a $250 million (€268 million) technology fund run by Doughty Hanson, said he was impressed by the calibre of the technology firms he had seen at Goodbody's Summit 2001 conference this week.

"Most of the companies I saw at the conference were very interesting with strong infrastructure technology," he says. "I'd say we will make between three to five investments in Irish companies from our fund." While not naming individual companies that Doughty are considering, Mr Powlick holds up the Dublin-based technology firm Marrakech as a good example of innovation.

"Marrakech is doing things differently to what people did before, by linking suppliers and buyer over one network," says Mr Powlick. "I also have great respect for Kelly Murphy's vision."

Doughty was lead investor in Marrakech's recent $24 million funding round and plans to reinvest in the company over the next few months, he says.

Mr Powlick is no stranger to the Irish technology scene. As a former head of Intel Capital, he led several large local deals, including Intel's investment in Baltimore Technologies.

"Baltimore is one of the most important technology companies to come out of Europe in recent years," he says. "I think many more Irish companies will go public and follow their example."

Mr Powlick is a non-executive director at Baltimore and also sits on the board of Marrakech. But this relationship with Ireland would be strengthened if Doughty decided to set up an office in Dublin.

"The benefits of such a move would be getting close to the entrepreneurs," says Mr Powlick. "While we feel we can get that by being based in London, we are considering an Irish presence."

Doughty has offices throughout Europe and needs to have a good understanding of a local market because its technology investments are concentrated on early start-up high-tech firms.

Unlike some of the other US-based technology funds that have turned their attention on Europe in recent times, Doughty is benefiting from getting into the technology game rather late.

Doughty only set up its fund last year after poaching Mr Powlick and Mr Nigel Grierson from Intel Capital. As a result, Doughty had not made many investments before the massive drop in valuations of technology firms since last March.

"I guess we are lucky in that we aren't looking after wounded babies like some other venture capitalists," says Mr Pollick. "Many of these firms have to reinvest their new funds in their companies."

With the drop in valuations, Doughty is able to negotiate a better deal when it invests in companies. This could place Doughty at an advantage in the European arena, which has only recently attracted world attention.

"I think Europe has been under-funded compared to the US, so there are opportunities here," says Mr Powlick. "Europe is developing some world-class technologies and is ahead in wireless because of the adoption of the GSM standard."

However, Mr Powlick is in no rush to invest the $250 million. "The markets have slumped but I believe we may not have reached the bottom yet," he says.