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Francisco Partners

Francisco Partners. Lvov S. Nagornov A. Parkhomenko A. Why FP? Why separate fund?. Investment – they really try to avoid loosers

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Francisco Partners

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  1. Francisco Partners Lvov S. Nagornov A. Parkhomenko A.

  2. Why FP? Why separate fund? • Investment – they really try to avoid loosers • Targeted on ICT companies, which have more predictable returns and future than typical a VC fund, investing in ICT start-ups. So the whole idea of FP is to find good companies in ICT, which have a good predictable market position. This is a crucial difference with the VC funds, where selection of ICT companies is quite random, because no one can predict whether a company will succeed of fail • Expertise • Brand and Networking • Limited size

  3. Why FP? Why separate fund? • Investment • Expertise – Are they capable of picking up winners? • All the founding partners of the firm have a broad experience in technology investing activities as well as in specifics of technology business. These skills and knowledge of the partners will ensure that Francisco Partners enters the market in the right time, invests in profitable portfolio companies, harvests high returns on the investments, and exits in the right time, making sure that both investors and the firm itself benefit the most. • Brand and Networking • Limited size

  4. Why FP? Why separate fund? • Investment • Expertise • Brand and Networking • Have people with experience lots of contatcs, several bankers,etc. • Limited size

  5. Why FP? Why separate fund? • Investment • Expertise • Brand and Networking • Limited size • Might be a credible signal to investors and market that fund is not oversubscribed and attracts money in accordance with deal flow, not flow of investors’ money, which can be subject to herding. FP cannot be a large fund, limited by the availability of deals; most of the companies FP is going to invest are quite small and not market leaders. That insures FP does not need a lot of capital (more $5 billion a year).

  6. Timing • Are going to invest in IT in 1999? • I know you will! • Might be a problem since you invest in 1999 and first dividends will be in 3-4 years, so in 2002-2003, fund will be liquidated in 2009 with 10 years maturity

  7. Terms overview

  8. Key features • High Fee for GP against High Expertise (the main source of income for GP!) • Limited Fund Size (to keep focused and deliver superior returns) • Substantial GPs’ Commitment / Sharing of Management & Transaction Fees (to address the conflict of interest problem)

  9. Performance Forecasts • a well established track record with impressive results • expected returns are not less than realized (or potentially realized) in the passed and present investments

  10. Thank you for your attention!

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